The surge in semiconductor prices triggered by explosive artificial intelligence demand—a phenomenon dubbed "chipflation"—is now compounded by geopolitical crisis in the Middle East and is expected to ease only in the second half of 2027, according to new forecasts.
Counterpoint Research held an online seminar on "Memory Price Surge and IT Market Impact" on the 12th, revealing that memory semiconductor prices jumped up to 180% in the first quarter compared to the previous quarter. "After the Chinese Lunar New Year holiday (February 15-23), global Big Tech companies rushed to secure memory supplies, pushing newly contracted prices up 130-180% from the previous quarter," said Hwang Min-sung, research fellow at Counterpoint Research.
"Server DRAM and High Bandwidth Memory (HBM) now account for 60% of total DRAM revenue, making Big Tech's aggressive AI investment the core driver of chipflation," Hwang said. "Geopolitical factors including the Middle East war have also contributed to price increases."
The competitive paradigm between the two memory giants has fundamentally shifted amid chipflation, analysts noted. The industry has moved away from volume-based market share competition in commodity products toward "profit margin maximization" driven by cost competitiveness. "SK Hynix, which dominated the HBM market early, currently leads in cost competitiveness," Hwang said. "However, Samsung Electronics' all-out effort to reverse profitability starting with HBM4 will be the semiconductor industry's biggest storyline this year."
The finished goods market for smartphones and PCs has reached critical levels due to legacy memory shortages and cost pressures, the analysis showed. "From the second quarter, when memory supply constraints intensify, small and mid-sized manufacturers will face survival challenges," Hwang said. "Conversely, this presents an opportunity for major players like Samsung Electronics and Apple, with their solid supply capabilities, to consolidate the fragmented market and seize leadership."
The memory semiconductor supply crunch is expected to persist at least through next year. "Increasing DRAM production capacity by 10% requires massive capital investment of approximately 150 trillion won," Hwang explained. "Expanding supply in the short term is difficult." He added, "Meaningful supply increases will only emerge in the second half of 2027, finally giving the market room to breathe."
