AI infrastructure is reshaping how the memory market allocates supply. IDC expects data centers to absorb about 70% of global memory output by 2026, up from roughly 20% to 30% in 2022.
In the report cited by BlockTempo, that change is framed not as a temporary shortage but as a permanent reallocation of capacity. For buyers outside the data center market, including smartphones and medical imaging systems, the issue is no longer just higher prices. It is shrinking access to supply.
HBM is consuming more wafer capacity
The core product behind the shift is HBM, or high-bandwidth memory, which stacks multiple DRAM layers and places them next to computing chips to feed the data throughput required by GPUs. According to the report, producing one HBM wafer consumes the capacity of more than two standard wafers.
That changes the math quickly. Each new AI data center does not just pull in a little more memory demand; it redirects wafer resources on a much larger scale. Manufacturers have a clear incentive to prioritize HBM because it carries the highest gross margin per wafer.
As a result, less supply is left for non-data-center buyers, and prices move higher across the board.
Smartphones are being hit first
IDC expects the impact to show up early in smartphones. Global smartphone average selling prices are projected to rise 14% to a record $523 in 2026, while shipments are forecast to drop 12.9% to 1.12 billion units. The report describes that as the biggest annual decline on record.
Entry-level phones priced below $100, a segment worth about 171 million units, are said to be approaching the point where current cost structures no longer work. Vendors are responding in direct ways: some are trimming camera modules and display specifications, while others are moving base memory back to 4GB, a configuration that had become uncommon after 2020.
The outcome is straightforward. Lower- and mid-priced smartphones are getting more expensive, and in some cases they are also getting slightly worse on specs.
Medical equipment is competing for the same components
The pressure is not limited to consumer electronics. The report says medical imaging systems, robots, and monitoring instruments rely on the same DRAM and NAND supply. Micron itself sells memory into medical imaging systems through its embedded business.
Hospitals have less room to adapt than smartphone buyers. Consumers can delay an upgrade cycle, but hospitals cannot simply swap memory parts inside a scanner because medical components often face multi-year qualification timelines. That leaves them bidding in the same market as hyperscale cloud operators while controlling only a fraction of the purchasing volume.
The result is either a higher price tag or a longer wait for delivery.
The market is questioning how long price-led growth can last
The pricing story that has supported the sector is starting to face pushback. The article points to SanDisk, which reported revenue and profit above expectations last week, but guided fiscal 2027 first-quarter revenue to $10.3 billion to $10.8 billion. The midpoint came in below the $10.8 billion market consensus.
Investors focused even more closely on management's breakdown of recent growth. About two-thirds came from price increases, while only one-third came from higher shipment volume. That distinction matters. Selling at a higher price is not the same thing as selling more units.
After that message hit the market, memory names sold off on Aug. 6. Western Digital fell 16%, SanDisk dropped 11%, and Micron was down as much as 6% intraday. The article says similar trading patterns had already appeared on July 24, July 28, and July 29.
Micron's numbers are still holding up
Micron's own fundamentals, however, remain strong in the report. The stock closed at $877.57 on Aug. 7, giving the company a market value of $991.1 billion, close to the $1 trillion mark. Over the past 12 months, revenue reached $90.27 billion, up 167% year over year, while net income totaled $50.47 billion, up 710.7%.
The shares moved from a low of $110.79 to a high of $1,255 within a year. Even after pulling back about 30% from the peak, the forward price-to-earnings ratio is still around 6, because earnings have risen faster than the stock.
Wall Street's repricing has been sharp. Price targets climbed from $190 in September last year to as high as $2,200 in June. TD Cowen and KeyBanc have more recently put their targets near $1,600. TipRanks said 28 of 29 analysts tracked rate the stock a buy, with a consensus target near $1,569. Counterpoint Research also estimates that Micron holds about 25% of the DRAM market and is one of only three global suppliers.
On-chain positioning is also leaning bullish
The article adds an on-chain angle. Based on Nansen's tracking of Hyperliquid perpetual traders, Micron carries the largest net long position among chip-related names, at about $7.7 million spread across 39 wallets. TSMC has a higher long-short ratio, but the net long notional is only a fraction of Micron's, according to the report.
Supply relief is likely to take time
The main variable is how quickly new supply can be added, and the answer in the article is: slowly. Building fabs takes years. SK Hynix's chief executive warned in July that the shortage could last beyond 2030.
In August, the company approved a $38.4 billion plan to build two new plants in Yongin and Cheongju. Even with the completion schedule pulled forward by 12 years from the original plan, the first-phase clean room is still not expected to begin operating until 2029.
That leaves smartphones, scanners, and AI servers competing for the same wafer capacity for years to come.