Seagate Warns High Memory Prices Continue Amid AI Demand

Seagate's commercial director, Ban-Seng Teh, has highlighted ongoing challenges in the memory chip market, stating that the surge in memory prices is driven by unprecedented demand from AI data centers. This situation suggests a departure from historical market cycles of demand and supply, indicating that high prices may persist as AI infrastructure continues to expand. Teh emphasized that the current state is unique and may signify the onset of a new semiconductor cycle, particularly affecting DRAM and NAND memory markets.

As companies like NVIDIA press for increased HBM production, major manufacturers are reallocating resources to focus on high-bandwidth memory, based on expected sustained demand. This fundamental shift threatens to establish a new reality where memory prices remain elevated, deviating from traditional cycles. Notably, Chinese firms are aggressively pursuing independent HBM supply chains, but leading manufacturers control current production. This trend highlights the increasing dependence on a limited number of manufacturers for critical AI infrastructure, potentially heightening market volatility and dependency in the long term.