Memory Shortage for Data Centers to Impact Consumer Prices, Says KB Securities

The persistent global memory supply crunch shows no signs of immediate abatement, with projections suggesting a worsening situation before any relief. This is largely due to a substantial amount of future memory production being locked into long-term contracts, particularly impacting the consumer PC market.

According to an analysis by the Korean investment firm KB Securities, a staggering 80% of Samsung's projected memory output for 2027 is already tied up in long-term agreements. This figure is even higher for High Bandwidth Memory (HBM), crucial for graphics cards and data center accelerators, with 100% of its yearly output pre-sold. The remaining 20% of general memory production, encompassing DRAM and NAND, is similarly constrained, with 70% covered by five-year contracts. This intense demand from hyperscalers expanding their data center infrastructure is a primary driver behind these agreements.

As a direct consequence, KB Securities anticipates a dramatic surge in the average selling price of specialized memory, forecasting an increase of 100% to 150% year-over-year. This upward pressure on pricing is expected to trickle down to the consumer market, with double-digit quarter-over-quarter price hikes for general RAM components anticipated after the new year. While one tech CEO recently dismissed concerns about a prolonged memory crisis, the current landscape, heavily influenced by the demands of artificial intelligence, suggests that elevated prices are likely to persist.

For large corporations like Samsung, these market dynamics are translated into highly optimistic financial forecasts. KB Securities predicts a robust 57% year-over-year increase in Samsung's operating profit for 2027, reaching an estimated 555 trillion Korean won, or over $4 billion USD. This positive outlook remains despite a recent 19% dip in Samsung's share price, which the firm attributes to broader market sentiment and macroeconomic uncertainties rather than a fundamental weakening of the company's earning potential. Ultimately, while investors may find solace in these projections, consumers should brace for continued high costs for memory hardware in the foreseeable future.