UBS: Memory Chip Monthly Sales Hit Record High; Supply Deficit Expected to Persist Through 2028

The global memory chip market just clocked its best month in history by a wide margin. According to the July "Memory Monthly" report from UBS, monthly sales hit a record $74.6 billion, marking a 31.7% month-over-month increase.

UBS notes that as artificial intelligence (AI) demand continues to grow and long-term supply agreement (LTA) negotiations remain ongoing, the memory cycle is "further strengthening". The firm expects this structural supply deficit to persist at least through mid-2028.

Market Breakdown

Looking at the segments behind this boom:

DRAM: Sales accounted for the majority of the market, totaling approximately $48 billion, an increase of 27.7% over the previous month.
NAND Flash: Performance was even more impressive, surging 40.7% month-over-month to reach a record $25.8 billion.

NAND flash serves as the primary storage medium for solid-state drives (SSDs) and data center storage equipment; demand for both has exploded alongside the surge in AI training and inference workloads.

Overall, UBS projects total industry revenue for memory chips to reach $992 billion for the full year of 2026. By 2027, that figure is expected to nearly double, hitting $1.76 trillion.

The bank identifies High Bandwidth Memory (HBM)—a specialized DRAM used in AI accelerators like NVIDIA GPUs—as the primary growth driver. UBS forecasts that HBM demand will grow 90% year-over-year in 2026 to roughly 33.1 billion Gb. By 2027, demand is expected to climb another 77% to approximately 58.7 billion Gb.

UBS notes that the primary beneficiaries of this memory pricing cycle are Micron Technology, as well as Korean giants Samsung Electronics and SK Hynix, as these three firms collectively control the vast majority of global DRAM and NAND supply.

Pricing Momentum

UBS believes that cloud companies will continue investing in AI infrastructure, thereby supporting memory chip demand and maintaining the structural supply deficit through at least mid-2028.

The firm has upgraded its DDR contract price forecasts, anticipating a 32% quarter-over-quarter increase in Q3 2026, followed by another 18% rise in Q4. NAND flash prices are expected to follow a similar trajectory, with projections of a 30% increase in Q3 and a 12% rise in Q4.

UBS predicts that the DRAM industry will face a structural supply deficit at least until Q2 2028, driven by a projected 36.2% year-over-year demand growth in 2027, which will significantly outpace the 19.3% supply growth.

Finally, UBS candidly outlined the factors that could challenge its bullish outlook:

"Customer affordability and the sustainability of AI-related capital expenditures remain the primary risks to this unprecedented upcycle," the bank noted.
This suggests that subsequent spending by hyperscale data center operators, rather than supply volumes, is the key variable it cannot fully model from a memory perspective.