Morgan Stanley Warns Mature DRAM Prices to Keep Rising: DDR4 Up 50% in Q3, SLC NAND Up 50% for Two Consecutive Quarters

Morgan Stanley (hereafter 'MS') warned in its latest report on Wednesday (19th) that supply tightness for mature memory chips such as DDR4 and SLC NAND will continue into the second half of 2026. The price surge shows no signs of easing—in fact, it is accelerating.

MS forecasts that mature DRAM products like DDR4 will increase by approximately 50% quarter-on-quarter in Q3 of this year, followed by another 10% rise in Q4. The uptrend for SLC NAND is even steeper, with projected increases of 50% in both Q3 and Q4. NOR Flash is also expected to gain support from industrial control, automotive, edge AI, and AI server demand starting in Q4.

The root cause of the price hikes lies in capacity reallocation: Samsung, SK Hynix, and Micron have significantly shifted wafer production toward high-margin products such as HBM, DDR5, and enterprise SSDs, squeezing out share for traditional DDR4 and SLC NAND.

HBM acts like a 'capacity black hole,' primarily due to vertical stacking and Through-Silicon Via (TSV) limitations, consuming roughly three times the amount of traditional DRAM wafers to produce one unit of HBM. According to UBS estimates, global HBM demand will reach 61.5 billion Gb by 2027, with NVIDIA alone accounting for 25.1 billion Gb—over 40% of total demand—forcing manufacturers to further tilt their production lines.

Moreover, next-generation DDR5 remains red-hot. Bank of America data shows that spot prices for 24GB DDR5-5600/6400 rose another 8% in August alone, bringing year-on-year gains to 483%. This component has surged from around $8 in mid-2025 to nearly $47 this month.

Industry insiders argue this shortage is not a cyclical downturn but a structural shift driven by AI compute demand rewriting memory allocation logic. High-priced HBM absorbs production capacity, making niche mature components scarce. Industrial, networking, and legacy server players are hit first and hardest. Short-term relief is unlikely; supply-demand rebalancing will only occur if manufacturers reinvest in mature lines or end users transition to new specifications—neither of which is expected to happen before year-end.