According to media outlet DIGITIMES, Samsung, Micron, and SK Hynix have already fully allocated their entire 2027 production capacity for DRAM and HBM, while NAND Flash capacity has also been largely pre-sold. Previously, SK Group warned that 2027 will face the most severe supply-demand imbalance in history. Although price increases are expected to moderate compared to 2026, 'persistently high prices' have become the new normal, leaving those who fail to secure supply in advance facing potential shortages.
The combined full-year DRAM production capacity of the three major manufacturers has already been fully booked for 2027, as the AI boom pushes the memory market into an unprecedented cycle of structural shortage.
On August 4, according to media outlet DIGITIMES citing industry sources, $Samsung Electronics (005930.KR)$ 、 $Micron Technology (MU.US)$ and $SK Hynix (000660.KR)$ have fully allocated their DRAM and High Bandwidth Memory (HBM) capacity for 2027, covering both large customers under long-term agreements and smaller buyers.
Meanwhile, Samsung Electronics, Micron Technology, and $SanDisk (SNDK.US)$ have already sold out their full-year NAND Flash capacity in advance, $Kioxia Holdings (285A.JP)$ with SK hynix expected to complete its allocation no later than the end of August 2026.
These developments mean that buyers who have not yet secured capacity allocations now face a potential scenario in 2027 where 'no inventory is available.' Meanwhile, cloud service giants and major AI firms continue to receive priority, further squeezing supply availability for consumer devices such as smartphones and PCs.
However, as major production capacity allocations are progressively finalized, the industry anticipates that price increases in 2027 will moderate compared to 2026. Nonetheless, supply tightness and cost pressures on end markets are unlikely to ease substantially in the near term.
AI Demand Dominates Allocation Patterns
The AI wave is the core driver behind this round of capacity sell-outs. Major manufacturers have recently begun signing three- to five-year long-term supply agreements (LTAs) with key clients, shifting the memory market away from its traditional commodity cycle toward a sustained seller’s market structure.
Chen Li-Pai, Chairman ofADATA, confirmed that the three major manufacturers have already sold out their entire 2027 capacity, with HBM and AI server-related applications expected to account for approximately 70% of total DRAM output.
With total production capacity constrained, manufacturers are prioritizing orders from cloud service providers (CSPs) and major AI companies, directly reducing allocation quotas for smartphone and PC makers.
Industry estimates suggest that actual capacity made available by manufacturers typically reaches only 60% to 70% of buyers’ original targets. Consequently, smartphone and PC manufacturers are expected to receive significantly lower DRAM allocations in 2027 compared to 2026.
SK Group Chairman Chey Tae-won recently stated that demand for AI semiconductors in 2027 is expected to surge by 60% to 100% compared to 2026, with overall storage demand projected to increase by 50% to 60%. The supply-demand gap is likely to widen further, leading to the most severe shortage and imbalance in history in 2027.
Doubts linger over NAND supply-demand reversal; enterprise demand continues to provide support
Compared to DRAM, the NAND Flash market has more suppliers, leaving buyers with some room for negotiation.
Observers remain skeptical about a NAND supply-demand reversal in 2027, arguing that newly released capacity combined with weak consumer demand could lead to a looser market in the second half of 2027, thereby increasing pricing pressure.
However, industry insiders remain cautious about this view.
Industry sources noted that demand for enterprise-grade solid-state drives (SSDs) will remain robust in 2027, and supply tightness is expected to persist into 2028. Evaluations of manufacturers’ capacity expansion plans should not be overly optimistic.
Chen Li-bai also pointed out that strong enterprise storage demand is tightening supply simultaneously in both the NAND Flash and hard disk drive markets.
Deposit-based model replaces traditional purchase orders
This round of capacity allocation has undergone a structural shift.
According to supply chain sources cited in reports, amid the ongoing spread of insufficient capacity in 2026, multiple cloud service giants and brand vendors are aggressively competing for capacity at any cost. Major players are securing future capacity well in advance and completing transactions under the deposit-prepayment model introduced by original equipment manufacturers.
The so-called capacity allocation covers not only large customers who have signed long-term agreements, but also smaller and medium-sized buyers who have already received capacity allocations for 2026 but with whom original equipment manufacturers (OEMs) may be reluctant to sign long-term contracts. Each OEM will internally coordinate and subsequently notify the respective allocated capacity quotas.
Industry sources noted that some manufacturers remain unaware that July to August represents a critical window for capacity allocation, adding, 'No one is publicizing this—everyone’s worried that if too many players rush in, their own share will shrink.'
Persistently high prices to become the norm, with price increases expected to moderate
Despite continued supply tightness, the price trajectory may differ from that seen in 2026.
The industry widely believes that, as the majority of capacity has already been allocated, final pricing for DRAM and NAND will likely be determined closer to actual shipment dates. Consequently, the pace of price increases in 2027 is expected to be more moderate compared to the exponential surge witnessed in 2026.
However, 'persistently high prices' will become the new normal.
Memory OEMs, holding significant control over capacity allocation, are expected to continue exerting upward pressure on market quotations. As a result, overall supply constraints and cost pressures on end users are unlikely to ease substantially in the near term.
For manufacturers that have not yet secured capacity commitments, the primary risks in 2027 will include being forced to procure at higher prices or facing supply-side vulnerabilities.
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