Journal · 2026-11-05 · 7 min read

Memory shortage to persist until late 2028, Team Group CEO warns

Team Group CEO Chen Ching-wen predicts no price drops until late 2028 as AI data centers consume global DRAM and NAND supply.

The global memory chip shortage is expected to worsen significantly from the end of 2026 through the end of 2027, with no downward price trend anticipated during that period. Team Group CEO Chen Ching-wen stated on the company's November 2, 2026 earnings call that the market may reach a point where "even money can't buy goods." The most critical figure in this assessment is the projected timeline for supply-demand equilibrium, which Chen estimates will not be achieved until the second half of 2028 or potentially later. This prolonged scarcity is driven by the massive consumption of DRAM and NAND flash by AI data centers, which are prioritizing high-volume enterprise sales over consumer markets. As a result, the spread between spot and contract prices has widened to 30% to 50%, forcing buyers to pay significant premiums for short-term supply. The crisis is not expected to ease for budget components until 2029, while high-end chips will remain in short supply for an even longer duration, fundamentally altering the cost structure for hardware manufacturers and end-users alike.

The Earnings Call and Revenue Surge

Team Group reported record quarterly revenue of NT$10.139 billion, approximately $308 million, during the earnings call on November 2, 2026. This figure represents a 34% increase compared to the previous quarter, highlighting the financial impact of the ongoing memory crisis. The company's performance is directly linked to the prioritization of enterprise and data center sales, which now constitute two-thirds of its business. This is a dramatic shift from the previous quarter, when only a quarter of the business was sold to other businesses, with the majority going to the consumer market. The surge in revenue underscores the profitability of selling to AI data centers, which are willing to pay premium prices for guaranteed supply. This shift in business mix is a key factor in the company's ability to maintain inventory despite the broader market scarcity.

The Spot Market Premium and Contract Gaps

Chen Ching-wen noted that the spread between spot and contract prices for memory chips ranges from 30% to 50%, indicating a significant disparity between short-term and long-term supply costs. "We have contracts but can't get enough volume, so we have to go to the spot market and pay a premium to grab supply," the Team Group chief said during the briefing. This dynamic forces companies to rely on the spot market for immediate needs, where prices are significantly higher than those locked in long-term contracts. The contract price for 16GB DDR5 chips climbed from $8.70 in October 2025 to $48 by September 2026, an increase of more than 550% in just 12 months. This rapid escalation in prices is not showing signs of letting up, with Chen stating there is "no downward price trend whatsoever." The reliance on the spot market is a critical factor in the overall cost inflation experienced by hardware manufacturers and system integrators.

Technical Context: DRAM and NAND Scarcity

For a smart reader unfamiliar with semiconductor details, DRAM (Dynamic Random Access Memory) is the volatile memory used for active data processing, while NAND flash is used for long-term storage. The current crisis is driven by the massive demand for both types of memory from AI data centers, which require high-bandwidth memory (HBM) and large-capacity NAND for training and inference workloads. The production of these chips is constrained by the limited capacity of foundries and the time required to build new fabrication plants. According to Tom's Hardware, even though Chinese manufacturers like CXMT and YMTC have increased their market share to almost 10%, most high-end DRAM and NAND flash chips still come from Kioxia, Micron, Samsung, and SK hynix. The prices for chips made by these Chinese companies still track the market closely, meaning they are not the budget savior that many were expecting. This technical constraint on supply is a primary driver of the ongoing price increases and shortage.

The AI Data Center Demand Driver

AI data centers are the primary consumers of the world's memory and storage supply, according to Tom's Hardware. The build-out of these data centers is continuing at a rapid pace, even as some political and economic factors suggest potential slowdowns. The demand for high-end memory, such as LPDDR5X-9600 and Nvidia N1-series SoCs, is particularly acute, with these components expected to remain in shortage for an extended period. The AI industry's insatiable appetite for memory is driving up prices across the board, as manufacturers prioritize these high-margin sales over consumer products. This shift in demand is a key factor in the prolonged shortage and price inflation, with no immediate relief in sight. The continued expansion of AI infrastructure is a major driver of the memory crisis, with no signs of slowing down in the near term.

Competing Predictions and Market Outlook

Acer CEO Jason Chen has predicted that component pricing will reverse by the latter half of 2027, suggesting that only high-end chips will remain in shortage while mainstream parts will see price declines. Chen claims that most major suppliers are hyping the shortage to preserve their margins, and that PCs will experience hikes between 5% and 20% until the end of 2026, plateau during the first half of 2027, and then decline. However, Team Group's Chen Ching-wen expects pricing for budget components to not ease until 2029, while high-end chips will continue to remain in short supply. These conflicting predictions highlight the uncertainty in the market, with no clear consensus on when the shortage will end. The lack of new capacity coming online is a key factor in the prolonged shortage, with no immediate relief in sight. The market is in a state of flux, with competing narratives about the future of memory pricing and supply.

Impact on Consumers and Hardware Prices

The ongoing memory crisis is having a significant impact on consumer hardware prices, with PCs and other devices experiencing price hikes of 5% to 20% until the end of 2026. The shortage is not limited to high-end components, with budget components also affected by the broader market dynamics. Consumers are facing higher prices for memory modules, storage drives, and other components, with no immediate relief in sight. The crisis is also affecting the availability of certain products, with some manufacturers struggling to secure sufficient supply for their production lines. This is leading to delays in product launches and reduced inventory levels, further exacerbating the shortage. The impact on consumers is significant, with many facing higher costs for essential hardware and limited options for upgrading or replacing their devices.

The Role of Chinese Manufacturers

Chinese manufacturers like CXMT and YMTC have increased their market share to almost 10%, according to Tom's Hardware. However, their chips are not the budget savior that many were expecting, as their prices still track the market closely. This means that even as Chinese manufacturers gain market share, they are not providing a significant price relief for consumers. The high-end DRAM and NAND flash chips still come from Kioxia, Micron, Samsung, and SK hynix, which are the primary drivers of the price increases. The limited impact of Chinese manufacturers on the overall market is a key factor in the prolonged shortage and price inflation. The market is dominated by a few major players, with limited competition from new entrants, leading to a sustained period of high prices and limited supply.

The Future of Memory Pricing

The future of memory pricing is uncertain, with no clear consensus on when the shortage will end. Team Group's Chen Ching-wen expects the shortage to worsen from the end of 2026 until the end of 2027, with no downward price trend during that period. Acer's Jason Chen predicts a reversal in the latter half of 2027, while Team Group expects budget components to not ease until 2029. The lack of new capacity coming online is a key factor in the prolonged shortage, with no immediate relief in sight. The market is in a state of flux, with competing narratives about the future of memory pricing and supply. The future of memory pricing will depend on the rate of new capacity coming online and the level of demand from AI data centers, with no clear resolution in the near term.

What to Watch and When

The key factors to watch in the coming months are the rate of new capacity coming online and the level of demand from AI data centers. The end of 2026 and the end of 2027 are critical periods, with Team Group expecting the shortage to worsen during that time. The latter half of 2028 is when supply-demand equilibrium is expected to be achieved, according to Chen Ching-wen. The market will be closely watching for any signs of new capacity coming online and any changes in demand from AI data centers. The future of memory pricing will depend on these factors, with no clear resolution in the near term. The market is in a state of flux, with competing narratives about the future of memory pricing and supply. The coming months will be critical in determining the trajectory of the memory crisis, with no immediate relief in sight.

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