Global Memory Chip Sales Hit Record $74.6 Billion as Analysts Forecast Steep Price Hikes

Global monthly sales for memory chips reached a record $74.6 billion, a surge of 31.7% month-on-month, according to a July report from UBS. The growth rate ran 2.8 percentage points above the 10-year seasonal average, signaling a strengthening upcycle that has analysts forecasting significant price increases for the remainder of the year.

Record Sales Driven by AI-Powered NAND

The record-setting month was powered by exceptional performance in the NAND flash memory segment, which is critical for data storage in AI servers. Key sales figures from the UBS report include:

• DRAM: Sales hit a record $48.0 billion, up 27.7% month-on-month, though this was about 8.0 percentage points below the 10-year seasonal average for the segment.
• NAND: Sales rebounded to a record $25.8 billion, soaring 40.7% month-on-month. This figure was approximately 16.9 percentage points above its 10-year seasonal average, indicating that AI-related demand is pulling the segment well ahead of historical trends.

The divergence suggests that while general-purpose DRAM demand is not yet at its peak, AI-specific storage needs are accelerating the market. The primary beneficiaries of this trend include major producers like Micron Technology, Samsung Electronics, and SK Hynix.

Analysts Forecast Sustained Price Surge

Citing accelerating AI-driven demand and ongoing Long-Term Agreement (LTA) negotiations, UBS raised its pricing forecasts significantly. The firm now expects contract prices to climb sharply in the second half of 2026:

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• DDR (DRAM) Pricing: Forecast to increase 32% quarter-on-quarter in Q3, followed by an 18% increase in Q4.
• NAND Pricing: Expected to rise 30% QoQ in Q3 and 12% in Q4.

UBS projects the DRAM industry will face a structural undersupply through at least the second quarter of 2028. The bank's model shows 2027 bit demand growing 36.2% year-over-year, far outpacing expected supply growth of 19.3%. This leads to a striking forecast for total memory industry revenue to reach $1.76 trillion in 2027.

Diverging Views on Cycle Duration

While analysts at Bernstein also noted the sharp price increases for the second quarter of 2026, they offered a more cautious long-term outlook. Bernstein anticipates that the pace of price hikes will "narrow notably" into the third quarter of 2026, warning that "demand destruction in the consumer segment will eventually happen."

This contrasts with the more bullish UBS thesis of an "unprecedented upcycle." Bernstein models memory prices to peak and begin normalizing from the second half of 2027 into 2028. However, both firms agree that LTAs being negotiated now could act as a structural buffer, potentially reducing the impact of a future market correction.

For investors, the key risk highlighted by UBS is the sustainability of AI-related capital expenditures from major cloud providers. The upcoming third-quarter contract negotiations will serve as a crucial test of whether the aggressive pricing trajectory materializes, clarifying if the current boom has the long-term momentum UBS predicts.