Memory monthly sales hit record $74.6B as analysts see price surge ahead

Investing.com - Global memory monthly sales reached a record $74.6 billion, surging 31.7% month-on-month and running 2.8 percentage points above the 10-year seasonal average, according to UBS's July Memory Monthly report — a data point that has both UBS and Bernstein forecasting sharp contract price increases ahead, even as the two firms diverge sharply on how long the rally can last.

The primary public beneficiaries of the memory upcycle are Micron Technology, as well as South Korean giants Samsung Electronics and SK Hynix, as the three companies together account for the vast majority of global DRAM and NAND supply. All three stand to capture the contract price gains that UBS and Bernstein now see accelerating through the second half of 2026. SanDisk is also a major beneficiary given that it primarily manufactures NAND flash memory.

DRAM posted record monthly sales of approximately $48.0 billion, up 27.7% month-on-month, though that reading came in roughly 8.0 percentage points below the 10-year seasonal average, suggesting demand is not yet firing on all cylinders across every end-market.

NAND, however, was a different story entirely. NAND sales rebounded to a record $25.8 billion, surging 40.7% month-on-month and landing approximately 16.9 percentage points above the 10-year seasonal average — a sign that AI-related storage demand is pulling the segment well ahead of historical norms.

"Our July Memory Monthly suggests that the memory upcycle is strengthening further amid accelerating AI-driven demand and ongoing LTA negotiations," UBS wrote in its report.

On pricing, UBS raised its DDR contract pricing forecast to increase 32%/18% quarter-on-quarter in the third and fourth quarters of 2026, respectively, with NAND pricing expected to rise 30%/12% QoQ over the same period. The firm projects the DRAM industry to remain structurally undersupplied through at least the second quarter of 2028, underpinned by 2027 bit demand growth of 36.2% year-on-year that is expected to significantly exceed supply growth of 19.3% YoY.

High-bandwidth memory is at the core of that demand thesis: UBS projects HBM demand to grow 90% YoY to approximately 33.1 billion gigabytes in 2026, then 77% YoY to roughly 58.7 billion gigabytes in 2027, driven by continued AI accelerator deployments across hyperscalers. UBS's aggregate numbers are striking: the firm projects total memory industry revenues reaching $992 billion in 2026 and $1.76 trillion in 2027.

Bernstein shares the near-term bullish read on prices, flagging a major contract price increase for the second calendar quarter of 2026 in both DRAM and NAND, but enters a note of caution that UBS does not.

"We still believe demand destruction in consumer segment will eventually happen and the pace of the price increase should narrow notably into 3QCY26," Bernstein wrote.

The brokerage acknowledges that pulled-forward consumer purchases have so far limited the damage, and that server demand has continued to absorb incremental supply allocated by producers, but it treats both as temporary cushions rather than durable supports.

The two firms also converge on the role of Long-Term Agreement negotiations as a critical market dynamic. Bernstein sees LTAs as a structural buffer: "LTAs can reduce the impact of a correction, and we expect more clarity on these LTAs as more are signed." UBS, too, cites ongoing LTA negotiations as a driver of the current upcycle's momentum.

The deepest disagreement between the two houses is on cycle duration. UBS's structural undersupply thesis runs to at least mid-2028 and is anchored in the AI capex build-out. Bernstein's price model is more measured: "We model memory prices to gradually peak and begin to normalize from 2HCY27 and into CY28", a framing that overlaps geographically with UBS's timeline but carries a meaningfully different tone, implying the peak is closer and the plateau less elevated.

UBS is candid about what could unravel its bull case. "Customer affordability and sustainability of AI-related capital expenditure are still the key risks to this unprecedented upcycle," the firm noted, an acknowledgment that hyperscaler spending discipline, not supply, is the swing variable that neither firm can fully model from the memory side of the equation.

For investors tracking the memory sector, the next set of signals will come from quarterly contract price negotiations and any public commentary from major memory producers on LTA terms.

Bernstein's expectation of a narrowing pace of price gains in the third quarter of 2026 sets up that period as a key test of whether UBS's more aggressive pricing trajectory materializes.

Longer-dated, the 2027 demand-supply balance in DRAM, where UBS's 36.2% bit demand growth projection runs nearly twice the pace of supply growth, will be the central variable in determining whether the $1.76 trillion industry revenue figure proves conservative or aspirational.

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