The ongoing memory supply crunch due to insatiable data center demand will likely create risks across the PC, smartphone and automotive markets in 2026, according to KeyBanc.
“With data center bit growth expected at +50% in 2026, hyperscalers are securing significant DRAM and NAND supply, driving contract pricing up +25% in 1Q26 and +10-12% in 2Q26 for DRAM, and +20% and +10-15%, respectively, for NAND,” said KeyBanc analysts John Vinh and Ryan Rosumny in an investor report. “Outside of the data center, fulfillment rates vs. forecasted demand are tracking at just 20-45%, leaving OEMs in PCs and smartphones struggling to secure capacity.”
This is expected to cause PC unit shipments to decline from 5% to 10% throughout the year and smartphone units to decline by 3% to 5%. This could also prompt Apple (AAPL) and Samsung (SSNLF) to increase prices by $100 to $150 per device.
“Competition for LPDDR5X intensifies as NVDA’s Vera CPU consumes 1.5TB per system (~20B Gb), equivalent to memory for 100M-150M smartphones (just under 10% of the smartphone market),” Vinh and Rosumny added.
These developments, however, prove positive for a range of semiconductor companies, such as Nvidia (NVDA), Broadcom (AVGO), Micron (MU), Monolithic Power Systems (MPWR), Marvell (MRVL), Cirrus Logic (CRUS), Lattice Semiconductor (LSCC) and Analog Devices (ADI). However, they could be negatives for Qualcomm (QCOM) and Arm (ARM).
KeyBanc increased Micron’s price target to $450 from $325, Lattice to $95 from $85, and Analog Devices to $375 from $330.