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AI demand influences memory market with rising prices, big investments

Published: 17 Nov. 2025, 16:24 Updated: 17 Nov. 2025, 17:30

A person walks by a logo of Samsung Electronics at an exhibition hall for the Asia-Pacific Economic Cooperation (APEC) in Gyeongju, North Gyeongsang, on Oct. 30. [AP/YONHAP]

What was expected to be a sluggish year for memory chips has turned into a full-scale boom, boosting Samsung Electronics and SK hynix stock and driving memory prices to their highest levels in years.

Samsung Electronics and SK hynix shares have skyrocketed 93 percent and 257 percent respectively since early January. Earlier forecasts warned of a “semiconductor winter” for the memory industry due to stagnant demand outside of high bandwidth memory (HBM), but the market has moved in the opposite direction. Demand has surged, prices have spiked and inventories have thinned dramatically.

The fixed transaction price for DDR5 16-gigabit chips reached $9.95 Thursday, up 165 percent from the start of the year. With momentum building across the sector, the growing expectation is that this is not just the first supercycle in seven years, but an "ultra supercycle" — an even stronger period of expansion.

Industry officials say “every factor in the market is now working in favor of memory chipmakers.”

The JoongAng Ilbo analysis of the last three years of capital expenditure (Capex) by the five major U.S. hyperscalers — Microsoft, Amazon Web Services, Meta, Alphabet and Oracle — shows the companies spent a combined $332.4 billion this year alone.

Most of the investment went into expanding data centers. The figure is 1.8 times more than it was in the same period last year, an increase of roughly 200 trillion won ($136.5 billion). Microsoft was the largest spender, investing 50.7 trillion won in the past three months as part of a plan to double its data center footprint within two years. Oracle, which is involved in the U.S. Stargate project, saw its third-quarter Capex jump 820 percent year-on-year.

AI-focused “neo-cloud” companies that lease AI data center capacity are also fueling demand. CoreWeave, Nebius and Iren — the three leading players — posted a combined Capex of $23.6 billion this year, up 490 percent from two years ago.

Memory chips are displayed at a custom PC shop in Hapjeong-dong, western Seoul. [LEE GA-RAM]

Supply constrained, demand exploding

This boom is notable because demand is overflowing not only for HBM but also for DRAM products like DDR5. The catalyst is AI. The prices for DDR5 and NAND flash, which are used for AI data centers, have soared, and the regular server replacement cycle has coincided with the spike. As prices rise, device manufacturers have jumped into competitive buying, lifting prices across nearly all memory categories.

Kwon Seok-joon, a chemical engineering professor at Sungkyunkwan University, said a supercycle formed because “what could have split into separate cycles for DRAM and HBM ended up overlapping.”

Kim Yang-paeng, a researcher at the Korea Institute for Industrial Economics & Trade, noted that memory makers' focus on HBM production “reduced output of other products, which also affected prices.”

With demand far outpacing supply, chipmakers are gaining the upper hand in price negotiations. Taiwanese tech outlet Digitimes and other foreign media reported that Samsung Electronics has postponed DDR5 price talks with customers.

“It’s true that the market has tilted enough toward suppliers that they can effectively set prices,” said a semiconductor industry official. Fixed transaction prices for DDR5 16-gigabit chips rose steadily through the year before jumping 16 percent in September and 43 percent in October, according to DRAMeXchange. Prices have continued rising in November, climbing 14 percent in just two weeks.

PC assembly shops — including those in Seoul’s Yongsan electronics market — are also feeling the strain. Seo Young-hwan, who runs three PC assembly stores, said DDR5 prices “began rising two months ago and have skyrocketed over the past month.” A 32-gigabyte DDR5 module now costs between 340,000 and 410,000 won, up from about 170,000 won in September.

“It’s an unusual situation — PC demand isn’t growing, but DRAM prices keep going up,” he said.

A notice at a custom PC shop in Hapjeong-dong, western Seoul, instructs employees to apologize to customers for the recent sharp rise in DRAM prices by showing comparisons on Danawa, a PC parts price-tracking website. [LEE GA-RAM]

When the boom ends, the real test begins

Estimates on how long the boom will last vary widely — from less than a year to more than three. The 2018 supercycle lasted about one to two years. Experts say a company’s true competitiveness becomes clear only when the cycle winds down.

Lee Jong-hwan, a professor of system semiconductor engineering at Sangmyung University, said chipmakers must reinvest boom-time profits into research and development to maintain a lead during downturns.

“To stay ahead, Korean firms need to secure leadership not only in HBM4 but also future generations like HBM5 and HBM6, and in technologies that connect memory and non-memory chips,” he said.

Jeong In-seong, a former SK hynix researcher and author of “The Future of Semiconductor Empires” (2019) said companies must analyze the root causes of the boom.

“The fact that suppliers now hold the power means customers have strong preferences for certain types of memory,” he said. “Manufacturers need to respond with the technologies and products that meet those needs.”

The SK hynix logo and a computer motherboard appear in this illustration taken on Aug. 25. [REUTERS/YONHAP]

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY PARK HAE-LEE [[email protected]]