With demand for low-power DRAM for AI servers surging, the supply shortage for consumer products is expected to intensify further next year. The supply-demand imbalance has persisted to such an extent that even Nvidia, the world's largest AI computing platform company, is struggling to secure sufficient quantities. As the upward trend in memory semiconductor prices (hereinafter referred to as "memory") continues, analysts predict that the reduction of low-cost products and the trend of rising smartphone prices will persist.
According to industry sources on the 6th, Nvidia appears to be able to secure only about 60% to 70% of the LPDDR (Low Power Double Data Rate)5X volume it requires next year. This is due to the rapid increase in demand for server-grade LPDDR5X as the importance of memory bandwidth and power efficiency grows with the high performance of AI servers. LPDDR is a type of DRAM specialized in reducing power consumption, and mobile devices such as smartphones have traditionally been its primary source of demand.
Previously, Nvidia reduced the capacity of the "SOCAMM2" module installed in its next-generation CPU (Central Processing Unit), "Vera," by roughly half, from 192GB (gigabytes) to 96GB. This move is known as a measure to minimize production disruptions by lowering the memory load per unit, as LPDDR5X supply has failed to keep up with demand. SOCAMM2 is a next-generation memory module based on LPDDR5X.
Starting next year, the demand base for LPDDR5X is expected to expand beyond Nvidia to include AMD and Intel. AMD is developing "6th Gen EPYC," a server CPU based on LPDDR5X, targeting a release in the second half of next year. Intel's "Crescent Island," an inference GPU (Graphics Processing Unit) based on LPDDR5X, is also expected to begin full-scale supply next year. Market research firm TrendForce analyzed that "AI servers will surpass smartphones to become the largest demand source for the global LPDDR market between 2028 and 2030."
The upward trend in LPDDR5X prices also shows little sign of abating. According to TrendForce, LPDDR5X contract prices rose by 78% to 83% in the second quarter compared to the previous quarter. The firm forecast an additional increase of 8% to 13% in the third quarter. The share of memory in smartphone manufacturing costs also exceeded 40% in the first quarter of this year.
The surge in LPDDR demand for AI servers is translating into a burden on the smartphone market. This is because, with memory manufacturers' production capacity limited, the increase in volume for AI servers is reducing the supply margin for consumer-grade LPDDR. In particular, low-cost smartphones, which find it difficult to reflect rising costs in their selling prices, are expected to be hit hard. Market research firm Counterpoint Research analyzed that, due to the impact of rising component prices such as memory, annual shipments of smartphones priced under $200 will decrease by approximately 40%, from 570 million units this year to 340 million units in 2030.
Premium smartphone makers are responding to cost burdens by raising prices. Samsung Electronics raised the selling price of the "Galaxy S26" series, released in March of this year, starting from the 1st. Prices for the 256GB and 512GB models of the S26 and S26 Plus were increased by 149,600 won each, while the price of the S26 Ultra 1TB (terabyte) model was raised by 276,100 won. Apple also raised prices for the "iPhone 17" series by 160,000 to 500,000 won per model last month.
An industry official stated, "As AI servers have joined the LPDDR market, which was previously mobile-centric, as a large-scale demand source, the memory supply-demand structure is being rapidly restructured." The official added, "Since it is difficult to expand production capacity in the short term, there is a high likelihood that LPDDR supply shortages and price increase pressures will continue next year."
in INDUSTRY
