UBS's latest industry research shows that the upward potential for memory chip prices will further expand in the second half of 2026. The DDR contract price is expected to be raised: in the third quarter of 2026, it will rise 32% from the previous quarter (previously expected to be 17%), to rise 18% in the fourth quarter (previously 12%), and to continue to strengthen on the basis of a sharp increase of 67% in the second quarter.
NAND has also been revised upwards and is expected to rise 30% quarter-on-quarter in the third quarter and 12% in the fourth quarter, continuing its strong cyclical performance.
Analysts believe that supply and demand in the DRAM industry will continue to be tight until at least the first half of 2028. Chip demand will grow by approximately 36.2% in 2027, significantly higher than the supply growth of 19.3%. The gap is difficult to bridge, and the imbalance between supply and demand has reached a level rarely seen in the past 30 years. If downstream inventory replenishment is not taken into account, the supply and demand gap will even further expand from -8.1% in 2026 to -13.6% in 2027.
Overall, the current memory chip upward cycle is expected to continue until 2027. Industry revenue is expected to reach US$992 billion in 2026 and rise to US$1.76 trillion in 2027. However, the main risk lies in the affordability of downstream customers. In particular, large cloud vendors may need to continue to raise capital through the capital market to support related investment expenditures.