The global memory chip market is currently at the peak of its current upward price cycle.

According to the latest monthly tracking report from Bernstein, DRAM and NAND contract prices continued to rise sequentially in May. Composite indicators point to a sequential increase of approximately 60% in the second quarter of 2026 (2QCY26), slightly exceeding the firm's prior forecast. However, as the demand-destructive effects on the consumer side gradually become apparent, the pace of price increases is expected to decelerate significantly in the third quarter (3QCY26).

In a report dated June 2 by analysts including Mark Li, Bernstein noted that DRAM contract prices in May rose further from April. Weighted average data suggests traditional DRAM contract prices for 2QCY26 will increase by 64% compared to 1QCY26, surpassing the firm's earlier model predictions. Meanwhile, in the NAND segment, bolstered by strong mobile NAND and SSD prices, the blended average price increase for 2QCY26 is expected to be around 60%, also slightly above expectations.

These price trends have direct positive implications for related memory stocks. Bernstein currently maintains "Outperform" ratings on Samsung Electronics, SK Hynix, Micron, and SanDisk, while maintaining an "Underperform" rating on Kioxia. The report also cautions that heading into the second half of the year, weak consumer demand will become the primary constraint on price momentum, and investors should be mindful of risks stemming from shifts in the pace of price increases.

DRAM: Q2 Surpasses Expectations, Server Demand Absorbs New Supply

DRAM contract prices in May continued their modest climb from April, with various sub-categories showing price increases to different degrees. On a weighted average basis, traditional DRAM contract prices for 2QCY26 are up approximately 64% from 1QCY26. Within this, PC DRAM is up about 46%, server DRAM about 53%, mobile DRAM about 80%, and consumer-grade DRAM about 85%.

For server DRAM, May contract prices increased 0-3% month-over-month, with the blended average price about 53% higher than in 1QCY26. Suppliers continue to shift capacity from other segments towards server DRAM. Concurrently, due to delays in HBM4 mass production, some wafer capacity has been freed up, but all new supply is being rapidly absorbed by robust demand. US cloud service providers remain the priority for supply, while long-term agreement (LTA) negotiations with Chinese cloud providers are still ongoing, with expected supply volumes and terms likely less favorable than for US customers.

In PC DRAM, demand resilience has exceeded expectations, partly due to strong demand for MacBook Neo. Price negotiations for 2QCY26 with PC OEMs are largely complete. Notably, DDR4 chip contract prices surged 19-25% month-over-month in May, primarily driven by supply led by Taiwanese manufacturer Nanya (2408 TT, not covered), with demand from low-end PCs and consumer applications still providing support.

For mobile DRAM, Samsung and Micron are demanding price increases of over 80% for 2QCY26 compared to 1QCY26, while SK Hynix's initial quotes are relatively moderate at around 55-60%. TrendForce expects the final settlement price increase to approach 80%. However, after two quarters of significant price hikes, smartphone OEMs have begun adjusting production plans. TrendForce forecasts a 16% decline in smartphone shipments this year, with mobile DRAM price increases expected to narrow to 0-10% per quarter in the second half.

Looking ahead to 3QCY26, TrendForce has raised its PC DRAM price forecast to a sequential increase of 8-13%, up from a prior forecast of 3-8%, but this still represents a significant deceleration compared to 2QCY26, with a further slowdown expected in 4QCY26.

NAND: Wafer Price Hikes Moderate, SSD and Mobile NAND Drive Overall Gains

In the NAND segment, the pace of wafer contract price increases narrowed further in May, rising only 1-2% sequentially, primarily due to increased caution among module makers regarding high-priced wafer purchases and a continued decline in procurement volumes. However, supported by strong mobile NAND and SSD prices, the blended NAND contract price increase for 2QCY26 is still expected to reach around 60%.

Specifically, mobile NAND (eMMC/UFS) contract prices for 2QCY26 are forecast to rise approximately 75-80% sequentially, mainly driven by eSSD demand continuing to squeeze supply. The 512GB UFS contract price is also expected to increase by about 80%. SSD contract price increases are projected at around 70%, similar to mobile NAND.

In the spot market, NAND wafer spot prices stabilized in May after a 7% decline in April, edging up 0.2% month-over-month. End-of-month spot prices remained about 20% lower than contract prices.

Bernstein notes that entering 3QCY26, as consumer-side demand weakens, NAND price momentum is also expected to narrow significantly. The firm maintains a structurally cautious stance on the NAND sector, primarily due to intensifying competitive pressure from Chinese manufacturers, particularly YMTC.

Spot Market: Stabilization After Brief Correction, Supply-Demand Gap Remains Pronounced

DRAM spot prices broadly recovered in May, as selling pressure from the previous few months was digested by the market. For PC DRAM, DDR4 and DDR5 chip spot prices recovered 5% and 7.4% month-over-month, respectively; server DRAM module spot prices increased 1.6-3.1% month-over-month.

Bernstein points out that server DDR5 module spot prices remain significantly higher than contract prices, especially for DDR5 modules, indicating a persistent and pronounced market supply-demand gap. With AI demand remaining robust, a sharp decline in spot prices in the near term is considered unlikely.

NAND spot prices also stabilized in May, largely absorbing the sharp decline seen in April. Bernstein views spot prices as a leading indicator for contract price trends, with the current stability providing some support for contract prices.

Long-Term Agreement Negotiations: US CSPs Largely Settled, Chinese Clients Still Negotiating

Progress in long-term agreement (LTA) negotiations has become a new focal point for the market. The report indicates that memory suppliers have largely completed LTA negotiations with US cloud service providers, while negotiations with Chinese cloud providers and consumer-side clients are still ongoing.

Bernstein believes the coverage scope of LTAs will significantly impact future price trends—the broader the coverage, the more cushioning effect it will provide in the event of a market correction.

The firm anticipates that memory prices will gradually peak in the second half of 2027 (2HCY27) and begin a normalization decline in 2028 as new production capacity comes online.