UBS doubles its DRAM price forecast as AI memory demand outpaces supply by 17 percentage points through 2027.

Investment bank UBS believes DRAM prices have considerable room to increase in the third quarter. In a recent note, UBS outlined that it expects the DRAM memory market to remain constrained until the second quarter of 2028. This assessment aligns with market research firm TrendForce's view that the DRAM market will face severe shortages in the third quarter, though TrendForce noted that high consumer prices and a higher base effect could moderate the pace of price increases in coming months.

UBS has significantly raised its price forecasts based on fresh industry checks. DDR contract pricing is now expected to jump 32% sequentially in the third quarter, compared to its earlier estimate of 17%. For the fourth quarter, UBS projects a 18% sequential increase versus the prior 12% forecast. The bank notes that specific price changes will vary by memory product brand.

On the supply-demand dynamics, UBS outlined that demand is expected to grow 36.2% in 2027, while supply growth is projected at 19.3%—a gap of 17 percentage points. For NAND flash memory, UBS expects prices to rise 30% sequentially in Q3, up from its previous 17% estimate, with a 12% sequential increase in Q4.

The stronger pricing trajectory carries significant revenue implications. UBS believes the higher prices will generate $992 billion in revenue for the memory industry in 2026 and $1.7 trillion in 2027. The bank also noted that elevated prices will continue to drive hyperscalers toward capital markets to fund their projects.

TrendForce's analysis of the broader DRAM market shows somewhat different figures. The firm expects DRAM memory prices to rise 18% sequentially in the third quarter and projects NAND prices to jump 15%. Like UBS, TrendForce anticipates continued significant supply shortages in the DRAM market and expects softer consumer demand and higher base prices to moderate the rate of price increases.

TrendForce also noted that for NAND specifically, as prices are already at record highs, buyers likely have limited capacity to absorb further increases—suggesting a 15% sequential rise reflects that constraint.