BNP Paribas forecasts the average NAND price will hit $279.50 per terabyte during 2026, up from $73.10 in 2025. JPMorgan expects the memory shortage to persist for at least another two years, with customers getting just 70% to 80% of their orders fulfilled. TrendForce says manufacturers are shifting capacity towards advanced, higher-value memory products , with mature processes increasingly squeezed as a result.
There are some alternatives available. Kioxia says its serial SLC NAND is an alternative to NOR flash . But moving an existing industrial or networking product onto a different chip can itself require engineering work and qualification. Nor is there much incentive for memory manufacturers to fix the problem by building new SLC capacity – which means manufacturers are unlikely to invest billions in capacity whose useful market may disappear. That creates an unusual trap: there may not be enough demand to justify new factories, but there is still more demand than the shrinking supply can satisfy.
Hardware manufacturers can eat the higher component bill and accept lower margins, or pass it on. “We'll just have to either have lower margins, or we'll have to raise the prices to the consumer,” Handy said.
The problem is one that seems to have no solution – at least in the short term. Ao expects memory prices to remain high over the next five years and does not expect them to return to 2023 or 2024 levels. That broadly fits with the structural nature of the shortage identified by TrendForce , which says there are no significant capacity expansion plans for NOR flash or SLC NAND .
Handy sees one possible way out, but it is hardly reassuring. “As long as the race between the hyperscalers keeps up to spend, then it will continue to be an issue,” he said.
Handy compares the AI buildout to the internet infrastructure boom of the late 1990s. Rather than enough capacity eventually arriving to restore balance, he thinks spending may simply overshoot what the market can economically support.
“I'm expecting the same kind of a thing to happen here that we've got too many people spending too much money on AI, and not really making any return on it yet,” he said.
Until then, the least exciting memory chips in a computer may become some of the hardest to replace. Or, as Ao put it: “Pretty much we have to get used to this high price, no matter which segment of memory.”
Chris Stokel-Walker Freelance Contributor Chris Stokel-Walker is a Tom's Hardware contributor who focuses on the tech sector and its impact on our daily lives— online and offline. He is the author of How AI Ate the World, published in 2024, as well as TikTok Boom, YouTubers, and The History of the Internet in Byte-Sized Chunks.
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/pc-components/dram/SPONSORED_LINK_URL
- https://www.tomshardware.com/pc-components/dram/nor-flash-and-slc-nand-production-are-under-threat-as-capacity-gets-routed-to-more-profitable-products-severe-undersupply-threatens-everyday-electronics#main
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