Memory price hikes ‘the new normal’ as AI boom fuels storage demand, Seagate says
Server DRAM prices expected to surge 90% in Q1 2026, driven by insatiable AI data center demand.
Seagate Technology, a leading storage hardware manufacturer, has declared that sustained memory price hikes are likely to be 'the new normal' for the foreseeable future. According to Chief Commercial Officer Ban-Seng Teh, the explosive growth in AI workloads has pushed the industry into an unusual 'supercycle,' breaking from traditional patterns of shortage and oversupply. While Seagate's own DRAM usage is limited compared to computer makers, the company is feeling the pinch of rising component costs, signaling a broad supply chain impact.
The data behind this warning is stark. Market intelligence firm TrendForce forecasts that prices for server DRAM—the high-speed memory critical for data centers—are expected to surge by approximately 90% in the first quarter of 2026 compared to the previous quarter. This would be the steepest quarterly increase on record. The primary driver is the insatiable demand from AI data centers, which require vast amounts of memory to feed the graphics processing units (GPUs) that train and run large language models like GPT-4 and Claude 3. Teh also cited volatile oil prices, driven by geopolitical tensions, as a contributing factor to rising manufacturing and logistics costs.
- Seagate executive declares memory price increases are the 'new normal' due to an AI-driven industry 'supercycle'.
- Server DRAM prices forecast to jump ~90% in Q1 2026, marking the steepest quarterly increase ever recorded.
- AI data center demand for GPU memory is the core driver, with oil price volatility adding secondary cost pressure.
Why It Matters
Rising memory costs will increase operational expenses for cloud providers and AI companies, potentially slowing innovation and raising service prices.