Bank of America Analysis: DRAM Prices Expected to Rise 30%-40% in Q3, AI Servers Continue to Squeeze Supply

TL;DR
· Bank of America’s channel survey shows that July PC DRAM contract prices are 15-20% higher than in June, with Q3 ASP increases potentially reaching 30-40%.
· Alphabet officially states that capital expenditures will significantly increase in 2027, with nearly $300 billion being the estimate from Bank of America analysts.
· Samsung's stock buyback and early dividend are still pending confirmation at the July 30 earnings call, with supply expansion and CXMT's market share increase being the main risks.

Bank of America’s latest channel survey continues to push up expectations for memory price increases. In July, more Tier 2 OEMs and module manufacturers accepted PC DRAM contract prices that were 15-20% higher than in June, and the average price increase for DRAM in Q3 could reach 30-40%, significantly higher than TrendForce's previous forecast of 13-18%.

The highlight of this round of price increases is not just the higher spot prices, but that downstream buyers are beginning to accept higher prices in quarterly contracts. Once PC DRAM contract prices rise, the supply-demand tension will no longer remain on the trading floor but will enter procurement budgets and inventory arrangements.

AI servers remain the most important driver. The demand for HBM, high-capacity DRAM, and server memory continues to absorb production capacity, squeezing the supply of ordinary PC DRAM and some DDR4. For Samsung Electronics, SK Hynix, and Micron, the increase in contract prices is higher than market expectations, directly affecting profit elasticity in the second half of the year.

Buyers Start Paying, Price Increases Transition from Spot to Contracts

TrendForce publicly predicted on July 3 that the contract prices for general DRAM would increase by 13-18% quarter-on-quarter in Q3, while NAND Flash contract prices would increase by 10-15%. This judgment already included factors such as AI server demand support and the supply of PC DRAM being squeezed by server production capacity shifts.

The new estimates from Bank of America’s channel survey are more aggressive. If the average price of DRAM rises by 30-40% quarter-on-quarter in Q3, memory manufacturers' price assumptions for the second half of the year will be significantly revised upwards.

The contract prices for 16Gb DDR4 and DDR5 have risen to about $35-40, with price increases already transmitted from the spot market to quarterly procurement contracts. Source: TrendForce, Bank of America Global Research

Spot prices are also supporting contract price increases. Source reports indicate that the spot price for 16Gb DDR5 is about $50. The reported spot price for DDR4 is above $80 according to Bank of America, which differs from some publicly available quotes, making it more suitable for report estimates rather than general market quotes.

Server memory is also at a high level. According to Bank of America, the contract price for 64GB DDR5/DDR4 server modules has surpassed $1000, with DDR5 around $1400. In other words, the price increases are not limited to a single category but are reflected across PC, server modules, and high-end DRAM.

The price of 64GB server DRAM modules has reached a historical high, with DDR5 around $1400 and DDR4 around $1100. Source: TrendForce, Bank of America Global Research

Google AI Capital Expenditures Seen Higher, But Not Official Guidance

The most striking number from the demand side comes from Alphabet/Google’s capital expenditures.

Alphabet’s official investor materials from June provided a capital expenditure guidance of $180-190 billion for 2026, stating that expenditures will "significantly increase" in 2027 compared to 2026, but did not provide an official guidance of $300 billion. Bank of America analysts estimate higher, around $195-205 billion for 2026 and close to $290-300 billion for 2027.

Bank of America expects Alphabet's capital expenditures to continue to increase significantly in 2026-2027; the predicted values in the chart are analyst estimates, not official guidance from Alphabet.

Based on this assumption, the procurement volume of memory chips in 2027 may increase by more than 50% compared to 2026. This judgment still belongs to the analyst model and is not based on actual orders, but it explains why memory stocks are highly sensitive to cloud vendors' capital expenditure expectations.

Alphabet’s Q2 performance also gave the market more confidence. The company disclosed that Alphabet's revenue grew by 24% year-on-year, Google Cloud revenue grew by 82% year-on-year, and the backlog of cloud business orders reached $514 billion. The growth of cloud business and strong AI demand will make investors more willing to believe that large tech companies still have the ability to continue investing in AI infrastructure.

However, capital expenditure forecasts will still need to wait for the company's subsequent guidance and actual order verification. If the construction of AI servers is delayed, the growth pace of memory procurement will also be extended.

Korean Exports Increase, Chinese Import Data Needs to Return to May Levels

Trade data also shows that memory demand remains high.

Korean customs data reported by KBS World shows that from July 1 to 20, Korea's exports reached $54.9 billion, a year-on-year increase of 52.3%. Among them, semiconductor exports were $22.1 billion, a year-on-year increase of 180.6%, accounting for 40.3% of total exports. This provides a realistic order background for strong AI server, enterprise procurement, and restocking demand.

Korea's semiconductor exports for the first 20 days of July were approximately $22.1 billion, a year-on-year increase of 181%, with the absolute scale still close to historical highs.

Chinese import data needs to be more cautious. The initial draft stating "China's June memory chip imports were $32 billion, a year-on-year increase of about 249%, accounting for 54% of total imports" lacks publicly verifiable sources. The publicly verifiable figure is cited by Zhejiang Merchants Macro from the "Monthly Monitoring Report on China's Chip Product Trade," stating that in May 2026, China's memory imports were $30.77 billion, accounting for 54.3% of chip imports, with a year-on-year increase of 248.7%.

This figure still indicates that the Chinese market's memory imports are at a high level, but the time should be changed to May. In the short term, even if CXMT continues to expand production, the Chinese market still relies on Korean and global leading suppliers for high-end DRAM, server memory, and some AI-related products. In the medium to long term, the increase in domestic supply may first affect DDR4 and some consumer DRAM prices.

NAND prices are also relatively strong. Source reports indicate that the spot price for 1Tb NAND wafers is about $25.5, with a week-on-week increase of 2%. However, the main storyline remains that PC DRAM contract prices exceed expectations and AI capital expenditures drive demand, while NAND serves more as evidence of tight supply and demand in the memory sector.

Samsung Shareholder Returns Still Just Potential Catalysts

In addition to prices and demand, Samsung Electronics may release new signals regarding shareholder returns.

Samsung's official website states that the company will hold its Q2 earnings conference call on July 30 at 10:00 KST. Market focus includes whether it will announce a large-scale stock buyback plan and whether it will distribute part of the cash dividend for 2026 in advance.

This part remains just a potential catalyst, not a fact that has already materialized. The actual scale of buybacks, dividend ratios, and execution timing will depend on the formal disclosure of Samsung's earnings report, the profitability level of its semiconductor division, cash flow arrangements, and the number of available treasury shares.

For memory stocks, price increases are the fundamentals, AI capital expenditures are the demand support, and Samsung's buybacks and dividends are the emotional catalysts. The combination of these three will increase market attention but cannot replace real orders and profit realization.

Risks in Supply and Capital Expenditures After 2026

Currently, the memory fundamentals are strong, but how long the price increases can last depends on two things.

First, whether large tech companies' AI capital expenditures can meet high expectations. Google's estimated capital expenditure of nearly $300 billion in 2027 is from Bank of America analysts, not an official company commitment. If cloud vendors slow down data center construction, the growth of memory procurement and the sustainability of prices will be reassessed.

Second, supply expansion may bring pressure again in 2026-2027. After memory price increases, manufacturers' willingness to expand production and redistribute capacity will increase. If new supply is released in concentration while demand growth slows, both DRAM and NAND prices may decline.

CXMT's expansion is also a long-term pressure. In the short term, its impact on Korean manufacturers' high-end product share is limited. However, if the increase in mid-to-low-end supply exceeds expectations, DDR4 and consumer DRAM may be affected first. Memory manufacturers are currently enjoying price elasticity, but they will face the time lag of order realization and supply returning later.