The ongoing supply squeeze in mature DRAM and NAND chips is about to get a lot worse, as per the latest projections from Morgan Stanley. Meanwhile, the retail prices for newer DDR5 chips are also showing no sign of cooling down, with spot prices for DDR5-5600/6400 24GB rising by another 8 percent in August alone.

Morgan Stanley's latest note does not bring glad tidings for the consumer electronics sphere. The Wall Street titan now expects the price of mature DRAM such as DDR4 to rise by 50 percent in Q3 and 10 percent in Q4 of 2026. Interestingly, the projected increase in SLC NAND prices is much more aggressive, with Morgan Stanley penciling in an increase of 50 percent in each of the remaining two quarters of the ongoing year.

As for the proverbial casus belli, the Wall Street titan identifies ongoing wafer migration towards HBM, DDR5, and higher-layer NAND, which leaves a rapidly shrinking share of the pie for DDR4 and SLC NAND.

Of course, we already know that HBM consumes around 3x as many silicon wafers as conventional DRAM. This is not just due to the vertically stacked layers. Rather, the inability to place memory cells close to Through Silicon Vias (TSVs) that physically connect HBM layers is also a major contributing factor to these dynamics.

What's more, the demand for HBM is only increasing, with UBS recently projecting that NVIDIA alone will consume around 25.1 billion Gb of HBM in 2027 out of an industry total of around 61.5 billion Gb.

Meanwhile, it is not as if DDR5 prices are about to moderate anytime soon. In fact, according to the Bank of America, the spot prices for DDR5-5600/6400 24GB rose by 8 percent month-over-month in August, which corresponds to a year-over-increase of 483 percent. Do note that the price of a given 24GB DDR5 chip was hovering at around $8 in mid-2025, but is now approaching the $47 price level!

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