Server DRAM Price Surge: Long-Term Strategy & Capacity Race - From Q4 2025

Server DRAM prices are projected to surge due driven by tight supply and robust cloud service provider demand. To secure supply, clients are aggressively negotiating long-term agreements, incentivizing manufacturers to expand capacity. Manufacturers are shifting production focus to high-margin DDR5. Market anticipates persistent undersupply, with substantial new capacity taking years to come online, while process upgrades accelerate short-term. PC DRAM also rises, but less significantly.

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Key Highlights:

• Significant Server DRAM Price Increases:
  • Strong cloud service provider demand and tight manufacturer supply are driving a substantial increase in server DRAM prices, significantly surpassing PC DRAM.
  • Manufacturers' limited ability to meet customer needs contributes to continuous price escalation.
• Long-Term Supply Agreements:
  • Cloud service providers are actively negotiating long-term purchasing agreements extending into future years to secure supply and incentivize manufacturers to expand capacity investment.
  • Client acceptance of price hikes reflects confidence in cloud service opportunities and willingness to stimulate manufacturer expansion.
• Manufacturer Strategic Shift:
  • To boost profitability, manufacturers are shifting production focus towards high-value DDR5 products, with their average selling price per wafer projected to exceed HBM.
  • Some manufacturers have begun reallocating capacity from HBM to DDR5.
• Capacity Expansion Challenges:
  • New cleanroom construction requires several years for large-scale production, creating a supply bottleneck.
  • In the short term, manufacturers will accelerate process upgrades or slightly advance cleanroom construction to boost bit supply growth.
• Market Outlook:
  • Data center investment visibility remains high, with increasing server shipments and DRAM content per server.
  • The overall market is expected to remain seller-dominated with persistent undersupply.