Memory chip makers reap AI windfall as prices surge, WSJ reports

Memory chip makers are capturing an increasing share of profits from the artificial intelligence boom as soaring demand for high-bandwidth memory (HBM) pushes up prices and raises costs for AI developers and cloud providers, the Wall Street Journal reported on Saturday.

Micron Technology said prices for its DRAM memory chips rose more than 60% in the quarter ended May 28 compared with the previous quarter, while NAND flash memory prices increased more than 80%. Shipment volumes rose only modestly, indicating that much of the revenue growth was driven by higher prices.

HBM chips have become a critical component for AI servers and data centers, but limited manufacturing capacity has kept supply tight as demand continues to grow.

The global HBM market is dominated by three manufacturers: Micron, Samsung Electronics, and SK Hynix. Building additional production capacity requires significant investment and can take several years, limiting near-term supply growth.

Higher memory prices are increasing costs across the technology sector. Apple this week raised prices for several MacBook and iPad models, citing rising memory costs, while AI developers continue to face higher infrastructure expenses.

Many AI companies have so far absorbed those costs rather than passing them on to customers, as firms continue competing to expand their user bases and market share.

The increased spending has also shifted investor attention toward memory manufacturers. Shares of Micron, SK Hynix, and Samsung have outperformed several major technology companies this year as demand for AI infrastructure continues to accelerate.

Cloud providers and AI model developers, including Microsoft, Amazon, Alphabet, and Meta Platforms, continue investing heavily in AI infrastructure despite the higher component costs.

Additional memory capacity is expected to come online over the next several years, though current supply constraints are likely to persist until new manufacturing facilities begin production.

The report said rising memory prices have highlighted the growing importance of semiconductor suppliers within the AI supply chain, as chip manufacturers benefit from one of the strongest pricing environments the industry has experienced in years.