Bernstein: Storage prices will see a major surge in Q2

Global prices for storage chips are currently at the peak of this cycle’s upswing.

According to Wind Chasing Trading Desk, Bernstein's latest monthly tracking report shows DRAM and NAND contract prices continued to rise month-on-month in May. Comprehensive indicators point to a quarter-on-quarter increase of about 60% in the second quarter of 2026 (2QCY26), slightly exceeding the institution’s previous forecast. However, as the destructive effects of sluggish consumer demand gradually appear, price increases are expected to visibly slow down in the third quarter (3QCY26).

According to a report released by Bernstein analysts including Mark Li on June 2, May DRAM contract prices further increased from April, with weighted averages showing that 2QCY26 traditional DRAM contract prices will rise 64% from 1QCY26, higher than the institution’s previous model estimations. Meanwhile, for NAND, strong support from mobile NAND and SSD prices is expected to drive a mixed average price increase of about 60% in 2QCY26, again slightly above expectations.

These price trends directly boost stocks related to the storage sector. Bernstein currently maintains an “outperform” rating for Samsung Electronics, SK Hynix, Micron, and SanDisk, and an “underperform” rating for Kioxia. The report also warns that in the second half of the year, weak consumer demand will become the main limiting factor for rising prices, and investors should pay attention to the risks arising from shifting price increase rhythms.

DRAM: Q2 Increase Exceeds Expectations, Server Demand Continues to Absorb Additional Supply

May DRAM contract prices continued a slight upward trend from April, with different increases across subcategories. Calculated by weighted average, 2QCY26 traditional DRAM contract prices are up 64% from 1QCY26, with PC DRAM rising about 46%, server DRAM up about 53%, mobile DRAM up about 80%, and consumer-grade DRAM up about 85%.

For server DRAM, May contract prices rose 0 to 3% month-on-month, and the mixed average price is about 53% higher than in 1QCY26. Suppliers continue to shift capacity from other segments to server DRAM; due to delays in HBM4 mass production, some wafer capacity was freed, but all new supply was quickly absorbed by strong demand. US cloud service providers remain top priority customers, while negotiations for long-term agreements (LTA) with Chinese providers are ongoing, and the supply and terms obtained are expected to be less than those for US clients.

For PC DRAM demand showed stronger resilience than expected, with strong demand for the MacBook Neo being one reason. PC OEM price negotiations for 2QCY26 are basically finished. Notably, DDR4 chip contract prices surged 19 to 25% month-on-month in May, mainly driven by Taiwan’s Nanya (2408 TT, not covered) leading supply, and demand for low-end PCs and consumer applications remains supportive.

For mobile DRAM, Samsung and Micron demanded that 2QCY26 prices be at least 80% higher than 1QCY26, while SK Hynix's initial quote was relatively mild, up about 55 to 60%. TrendForce estimates final transaction price increases close to 80%. However, after two quarters of sharp price hikes, smartphone OEMs have begun to adjust production plans—TrendForce expects smartphone shipments to fall 16% this year, and mobile DRAM price increases are expected to narrow to 0–10% per quarter in the second half.

Looking ahead to 3QCY26, TrendForce raises PC DRAM price expectations to 8–13% quarter-on-quarter, higher than the previous forecast of 3–8%, but still significantly slower than 2QCY26, with growth expected to further slow in 4QCY26.

NAND: Wafer Price Increases Slow, SSD and Mobile NAND Drive Overall Gains

For NAND, May wafer contract price increases further narrowed, up only 1–2% month-on-month, mainly because module makers became cautious about buying high-priced wafers, and procurement volumes continue to drop. But with strong mobile NAND and SSD price support, the mixed NAND contract price increase is still expected to hit about 60% in 2QCY26.

Specifically, mobile NAND (eMMC/UFS) contract prices in 2QCY26 are expected to rise about 75–80% quarter-on-quarter, mainly driven by eSSD demand continuously squeezing supply. 512GB UFS contract price increases are also forecast to be around 80%. SSD contract price increases are expected to be around 70%, close to those of mobile NAND.

In the spot market, May NAND wafer spot prices stabilized after falling 7% in April, rising slightly by 0.2% month-on-month. By month’s end, spot prices remained about 20% lower than contract prices.

Bernstein points out that after entering 3QCY26, declining consumer demand is expected to significantly slow NAND price rises as well. The institution remains cautious on the NAND segment structurally, mainly due to ongoing rising competition pressure from Chinese makers (especially YMTC).

Spot Market: Stabilized After Brief Pullback, Supply-Demand Gap Remains Significant

May DRAM spot prices rebounded overall, and market selling pressures from previous months have been digested. For PC DRAM, DDR4 and DDR5 chip spot prices rebounded 5% and 7.4% month-on-month; server DRAM module spot prices rose 1.6–3.1% month-on-month.

Bernstein says server DDR5 module spot prices remain much higher than contract prices, especially DDR5 modules, indicating the supply-demand gap is still pronounced. With strong AI demand, the likelihood of spot prices plummeting in the short term is low.

NAND spot prices also stabilized in May, and April’s sharp decline has mostly been digested. Bernstein believes that spot prices can serve as a leading indicator for contract price trends, and current stability provides support for contract prices.

Long-term Agreement Negotiations: US CSP Settled, Chinese Clients Still Negotiating

Progress in long-term agreement (LTA) negotiations has become a new market focus. The report shows that storage suppliers have basically completed LTA talks with US cloud service providers, but negotiations with Chinese cloud service providers and consumer customers are still ongoing.

Bernstein believes LTA coverage scope will be important for future price trends—the broader the coverage, the more pronounced the buffering effect will be if the market experiences a correction.

The institution predicts storage prices will gradually peak in the second half of 2027 (2HCY27), and begin to normalize and decline in 2028 (CY28) as new capacity comes online.

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