East Asian Technology Intelligence
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This story ran in Issue #101, alongside three other stories.
The global semiconductor market is projected to surge to over $1.65 trillion in 2026. This fast growth is driven almost entirely by the rising prices of DRAM and NAND. It is not driven by a broad recovery in the chip industry. This is a structural shift in how memory holds economic power in the chip ecosystem. Memory prices rose sevenfold over the last 12 months, as reported by PC Watch. This shows a market decoupling, where memory now dictates pricing power far beyond its historical share.
Western news tends to view chip cycles as uniform. But the Japanese business press understands that memory now operates on its own gravity. Outlets like PC Watch target engineers and supply chain professionals. They do not write that the market is simply up. Instead, they write that memory is distorting the market. They know that downstream industries will pay these costs directly. The cause is fast demand for AI infrastructure, along with tight capacity for advanced packaging. We also see the lasting effects of the 2023 downturn, when memory makers cut back their plans.
This surge is Japan’s version of the oil shock, but applied to digital goods. The 1970s oil crisis suddenly made energy supply and pricing highly strategic. In the same way, this memory crunch makes digital infrastructure central to business plans. Nations and firms that failed to secure diverse memory supply chains will face limits. Both high prices and low supply will stall their AI plans. Relying on spot market purchases for critical memory in this market is a big mistake.
Some people assume that chip shortages are over or that memory prices will soon flatline. This view misses the main drivers of demand. This is not a simple inventory fix. It is a deep, lasting shortage of a vital part. It takes years to build new advanced memory fabs. Expanding production capacity to meet this demand takes time. AI plans simply cannot wait that long.
To see how long this fast growth will last, look at two key signs. First, track capital spending plans from Micron, Samsung, and SK Hynix for their 2025 and 2026 HBM and advanced DRAM projects. Look for actual capacity growth for cutting-edge nodes, not just general fab upgrades. Second, track the order books for advanced packaging equipment suppliers. These firms include Disco, Lasertec, and Tokyo Electron. Their backlogs will show if memory capacity is growing to meet these high prices.
For the wider picture, see Japan Semiconductor Ecosystem.
This story appeared in AsiaAI.FYI Issue #101.
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