Surging memory costs are reshaping the storage industry's traditional boom-bust cycle
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Seagate CCO Ban-Seng Teh said this week that memory price hikes had become "the new normal" for the storage industry, describing current market conditions as a supercycle driven by AI data center demand that shows no sign of following historical patterns of recovery.
"It's hard to tell if it will last forever," Teh told the South China Morning Post , adding that the current cycle was "very unusual because in the past we went through cycles of shortage and oversupply.”
Seagate has obviously felt the pressure of spiralling memory prices , with Teh confirming that the company has “definitely seen increasing costs” from rising DRAM prices, though he noted its own DRAM consumption was modest relative to PC makers or hyperscale data center operators.
You may like Kioxia exec says the AI boom means the era of the cheap 1TB SSD is over Hard drive prices have surged by an average of 46% since September — iconic 24TB Seagate BarraCuda now $500 as AI claims another victim HDD prices spike as AI infrastructure and China's PC push collide According to TrendForce, server DRAM contract prices were forecast to surge roughly 90% quarter-over-quarter in Q1 2026, the steepest single-quarter increase on record. What’s worse is that TrendForce revised that figure upward from an earlier estimate of 55-60%, citing worsening supply-demand imbalances as cloud service providers continued pulling forward orders to secure allocations. PC DRAM prices are also forecast to more than double QoQ over the same period, also a record.
Although Seagate may use less DRAM than other customers, there's no way it can avoid these rising costs or the subsequent price hikes necessary to maintain its margins.
DRAM isn't the only source of price pressure for Seagate, either. Volatile oil prices caused by recent conflict in the Middle East — crude briefly surged to a four-year high of nearly $120 a barrel in the past few days before retreating below $100 — have also complicated Seagate's logistics. Teh says the company is actively reviewing shipment routing in response to that crisis.
Despite the cost pressures, Seagate is riding the same wave of AI demand that is driving memory prices up. Teh said annual growth in data storage demand, which his team had expected to stay below 20% five years ago, is instead expanding in the mid-20s percentage range.
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Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
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- https://www.tomshardware.com/tech-industry/seagate-cco-says-memory-price-hikes-are-the-new-normal#main
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