Samsung has raised the supply price of its NAND flash memory by more than 100% in the first quarter of 2026, a move that has shocked customers and amplified an already acute shortage in the storage‑chip market. The company completed contract talks with major buyers at the end of 2025 and implemented a new pricing system from January, and is now renegotiating rates for the second quarter as demand shows no sign of abating.
The price surge is being driven by surging demand from AI infrastructure and enterprise storage. Data centres expanding capacity for AI training and inference are gobbling up high‑performance, enterprise‑grade solid‑state drives, while “edge” and device‑level AI is nudging smartphones and PCs toward larger, faster NAND configurations. With multiple leading suppliers—including SK Hynix—following similar pricing strategies, the market has shifted from cyclicality to a broad, industry‑wide repricing.
Supply constraints are structural. Manufacturers restrained capital expenditure in the prior cycle and capacity for NAND did not expand materially; building new wafer fabs and fabs for NAND is both capital and time‑intensive. Kioxia (formerly Toshiba Memory) says its 2026 NAND capacity is already sold out and expects tightness to persist through at least 2027, while analysts at Nomura warn that meaningful new supply may not arrive before early 2028.
Global banks and brokerages are rapidly revising forecasts. Citi now projects that average selling prices for DRAM and NAND products could climb 88% and 74% respectively in 2026—far higher than earlier projections—reflecting what analysts call a “storage‑chip supercycle” driven by AI. Market research firm TrendForce had earlier modelled smaller NAND gains for late 2025, but the current price action has handily exceeded those estimates.
The ripple effects will reach hardware makers and consumers. Higher memory costs will squeeze margins or force price increases for smartphones, PCs and automotive electronics; industry observers already expect some consumer‑level products to be repriced. Automakers and other sectors that depend on automotive‑grade memory are warning of shortages and price pressure, and hyperscalers face the choice of absorbing higher costs, passing them on to customers, or accelerating vertical integration and long‑term contracting.
For manufacturers the near‑term outlook is unambiguously positive: elevated prices and sold‑out capacity translate into fatter margins and stronger cash flows. But the environment also creates incentives for accelerated capital investment and for new entrants to re‑enter capacity expansion plans—moves that take years to materialise and could sow the seeds of a future supply glut. Several suppliers have begun coordinating capacity allocations to avoid disorderly bidding, with Kioxia indicating it will prioritise long‑term partners rather than simply selling to the highest bidder.
Policy and geopolitical stakes are rising. Energy‑intensive, high‑value semiconductor capacity is now an economic prize that governments want onshore or under secure supply arrangements; the supercycle may intensify subsidy races and reshape export‑control conversations. For buyers, long‑dated contracts and strategic inventories will become routine tools to manage risk in a market where demand growth from AI has outrun the industry's ability to respond quickly.
Investors will watch upcoming quarterly results closely: Samsung and SK Hynix report fourth‑quarter 2025 results on January 29, and their commentary will help determine whether the pricing momentum is sustainable or a temporary disequilibrium. For now, the market looks set for a prolonged period where storage chips command prices far above the levels seen in the last cycle, with broad implications for technology costs, corporate strategy and industrial policy.