The DDR5 Memory Shortage: What's Really Going On

If you've been planning a server upgrade or infrastructure refresh lately, you've probably noticed something's not quite right: DDR5 prices are significantly higher than expected, lead times keep getting pushed back, and the specific modules you need are often out of stock or on back order.

There are fundamental shifts happening in the memory market that will affect server procurement for the foreseeable future. Here's what's driving the change and what it means for your infrastructure planning.

How We Got Here (2021-2023)

When DDR5 first arrived in 2020, the challenges weren't primarily about the memory chips themselves. The technology required entirely new supporting components, things like dedicated power management ICs and updated voltage regulation circuits, which were already in short supply. Motherboard manufacturers had to redesign their platforms from the ground up, slowing early adoption.

The pandemic compounded these issues with factory shutdowns and shipping delays, meaning DDR5 availability increased far more slowly than the industry anticipated.

What's Different Now

Fast forward to today, and we're facing a completely different set of challenges. The pandemic related logistics issues have largely resolved, but three major forces are creating sustained pressure on DDR5 supply.

AI Infrastructure Demand

Every major memory manufacturer is redirecting production capacity toward High Bandwidth Memory (HBM) and other specialised chips required for AI systems. TrendForce reports that the DRAM market is heading into a supply shortage from Q4 2025 onwards as cloud service providers continue scaling their AI infrastructure.

DRAM prices have increased 175% year-over-year as of Q3 2025, a clear indication of how severe the supply demand imbalance has become.

Priority Allocation

The largest data centre operators and hyperscalers are receiving priority access to available DDR5 production. Even these tier one customers are reportedly receiving only around 70% of their orders. This leaves significantly reduced availability and extended lead times for the broader market.

Manufacturer Strategy

Samsung, SK hynix, and Micron are maintaining tight supply levels whilst signalling further price increases. Some industry forecasts suggest quarterly rises of 30-50% continuing into mid-2026, driven by both sustained demand and the need to balance limited production capacity between HBM, DDR5, and other memory types.

The DDR4 Phase-Out

As manufacturers reduce production of DDR4 and other legacy memory types, the spare capacity that once helped stabilise supply has effectively disappeared. This transition has driven DDR4 prices up 38-43% quarter-on-quarter according to Inspire2Rise, as suppliers redirect resources toward DDR5 production.

Despite these constraints, the DRAM market continues growing rapidly. Mordor Intelligence projects the global DRAM market will rise from $108.7 billion in 2025 to approximately $233 billion by 2030. DRAMeXchange estimates DRAM revenue will reach $136.5 billion in 2025, a 51% year-over-year increase driven primarily by AI and server memory demand.

What's Coming

Looking ahead 6–18 months, the outlook points toward continued tight conditions rather than immediate improvement, driven by limited fab capacity, constrained wafer allocation, and manufacturers prioritising high-margin products like HBM. Forecasts also suggest further DDR5 price increases throughout this period, as shown in our projected pricing trend chart.

High-density server DDR5 is likely to remain difficult to source. Consumer-grade DDR5 UDIMMs may see some stabilisation sooner, though availability won't improve evenly across all capacities. Lead times will remain unpredictable, making forward planning essential.

What This Means for Your IT Planning

As the industry navigates this surge in AI-driven demand and the ongoing transition to DDR5, memory supply and pricing will likely remain challenging throughout 2025 and into 2026.

If you're planning server upgrades or new deployments, here's what you need to consider:

• Plan early: Build extended lead times into your procurement schedules. What used to take two weeks might now take two months.
• Stay flexible: Be prepared to adapt specifications where possible. We can often source equivalent configurations using different module densities or speeds.
• Consider alternatives: Sometimes the perfect spec isn't available, but a comparable solution is.

At ServerSource, we continuously monitor component availability and market trends across our supplier network. Whether you're upgrading existing infrastructure or deploying new systems, we can help you navigate current market conditions and secure the right configuration for your requirements.

If you're concerned about memory availability for an upcoming project, get in touch with our sales team to discuss your options.