This year's CES consumer electronics show yielded several notable announcements from industry giants like Dell (DELL.US), Intel (INTC.US), NVIDIA (NVDA.US), and AMD (AMD.US). However, what ultimately struck observers was the severe shortage of memory and storage, driven by surging AI demand, which is likely to influence the trajectory for the remainder of 2026. Wedbush Securities analyst Matt Bryson noted that while first-quarter contract prices for many DRAM components have not yet been finalized, suppliers are still expecting increases of 50% or more. Bryson wrote in a report to clients, "Hyperscale cloud providers appear to be soaking up all new available supply, and as capacity shifts to support these customers, coupled with expectations for higher contract prices, it seems to have driven a significant spike in secondary market prices." However, Bryson added that disruptions for smaller customers are "easing," as the PC market is now forecast to experience only a mid-single-digit year-on-year decline. Nevertheless, these issues may garner more attention once the price hikes are finalized. Bryson further stated that the price increases could eventually impact some server customers as well, given that server delivery lead times are "surging." Among the companies likely to benefit substantially from the sharp rise in DRAM prices are Micron (MU.US) and SanDisk (SNDK.US). Bryson indicated that with SanDisk removed from the Apple supply chain, it now has a lower comparison base, and its pricing is expected to "significantly outperform" the industry, with a 50% increase seen as the base case. Bryson added that other potential beneficiaries include Pure Storage (PSTG.US) and Silicon Motion (SIMO.US). NVIDIA's Impact NVIDIA's massive scale means its actions inevitably have a significant impact on the semiconductor industry. While it may also benefit from tight memory supply (as its performance routinely outpaces competitors), it could also further exacerbate pressure on the memory space. Bryson explained, "NVIDIA's new memory tier (connected via BlueField-4) appears set to significantly increase overall memory demand; a rough calculation we encountered suggests the new tier adds over 40% to AI workload demand." BlueField-4, launched in October 2025, combines the NVIDIA Grace CPU with the NVIDIA ConnectX-9 networking product, designed to boost computing power and help support AI factories. HDD Demand "Strong" Bryson stated that demand in the hard disk drive (HDD) sector, home to Western Digital (WDC.US) and Seagate (STX.US), is "strong." He pointed out a "significant gap between supply and orders," a gap that could widen further throughout the year and potentially persist into 2027. Consequently, he believes price trends are likely to move higher, with shortages for cloud service providers becoming apparent as contracts for 2028 are already under negotiation. Impact on Intel and AMD? While rising memory and storage prices benefit several companies, they have clearly also had some negative impact on demand. Multiple PC and smartphone manufacturers have cut manufacturing forecasts, with the industry now anticipating low-single-digit declines for both markets, whereas low-single-digit growth was previously expected. Given that Intel and AMD are the two largest PC-centric semiconductor companies, any drop in demand is likely to affect them. For Intel as a whole, rising memory costs are a cautionary signal, but the company has other areas with a greater impact, particularly its foundry business. Bryson said that for the company led by Pat Gelsinger, a successful rollout of its 18A process would be a "meaningful positive step." Earlier this month, Intel announced it had delivered the first 18A products. Nonetheless, any cuts to PC manufacturing volumes represent a "significant concern" for Intel, as they impact shipments, capacity utilization, and pricing in a segment that accounts for about 60% of its sales. Bryson added that given Intel's involvement in the server market, any extension of server lead times could also have a negative impact. For AMD, Bryson views the impact of rising memory prices as a more mixed picture, as the current focus is primarily on its AI accelerator portfolio. "...we believe AMD faces some risk if PC demand worsens due to memory price increases (we are less concerned about servers, as AMD is likely to continue gaining share there and has a higher weighting in CSP demand)," Bryson explained. He continued, "But we also believe that, for the foreseeable future, AMD's stock performance will be driven by the company's anticipated AI GPU performance (rather than other metrics). In this regard, any ability to resume shipments to China could provide an immediate benefit (again, the ultimate timeline for US license grants and/or Chinese approval to purchase US AI chips remains unclear to us at present)."