Chinese Memory Makers Demand Prepayments, Customers Have No Choice

Just a year ago, it was memory makers courting customers. Today the roles are reversed. Chinese companies YMTC and CXMT, capitalizing on the global shortage of DRAM and NAND chips driven by the AI boom, have started demanding prepayments from customers for future deliveries, before batches of memory even leave the factories.

A mechanism that would have seemed unthinkable in the semiconductor industry until recently has become routine for electronics manufacturers. Memory distributors have started requiring advance payments from some customers to guarantee access to chips before they even reach the market. It's a reversal of the typical seller-buyer relationship, in which it was the manufacturer who had to court the customer, not the other way around.

China's Investment Offensive

YMTC and CXMT are pursuing an aggressive capacity expansion already being called an 'epic expansion' within the industry. YMTC plans to more than double its NAND flash production capacity, with new plants ultimately set to process around 100,000 silicon wafers a month. CXMT, meanwhile, is focusing on DRAM for computers, servers and AI systems, trying to fill the gap that Samsung, SK Hynix and Micron have been unable to cover.

Western and Korean memory giants have redirected their production capacity toward more lucrative contracts tied to HBM memory for AI data centers. Standard DRAM and NAND for ordinary consumers has taken a back seat, opening the door for Chinese manufacturers to capture a share of the global market, even though their technology still lags behind the leaders.

The Bill for Customers

The effects are already being felt by electronics makers and consumers. According to TrendForce, prices of conventional DRAM memory rose 90 percent quarter over quarter in the first quarter of 2026, while NAND flash memory rose nearly 60 percent. A RAM module that cost around 200 zlotys just a few months ago can now cost up to ten times more.

The price hikes are translating directly into the cost of finished devices. In laptops with 16 GB of RAM, production costs have risen by $40-50, and in smartphones by around $30. Memory's share of a PC's total cost has jumped from a traditional 15-20 percent to 30-40 percent. In budget smartphones, memory costs now account for as much as 60 percent of production cost, which has driven a 22 percent drop in shipments of models under $400.

It's getting more expensive every month. I wouldn't even expect lower prices by the end of the year - Daniel Maikowski, technology journalist at Gazeta.pl

Manufacturers Retreat From the Consumer Market

Some companies have taken drastic steps. Micron announced it is pulling its consumer brand Crucial from retail sale, redirecting all production to corporate clients and AI data center operators. OnePlus announced it will withdraw from the US, Canadian, European and Indian markets, and its sub-brand Nothing's CMF confirmed it is scrapping the launch of the Phone 3 Pro in 2026. Apple, for the first time, openly acknowledged it will raise prices on select Mac and iPad models, in some cases by as much as $300.

The hardest hit are smaller players, such as custom PC builders, who lack the bargaining power of large corporations. Makers of finished laptops and desktop PCs can partly cushion the impact of the price increases thanks to previously signed contracts, but those protections have a limited lifespan.

What's Next for the Memory Market

Analysts see no quick fix. New production lines that could meaningfully boost global memory supply aren't expected to come online until 2029-2030. Until then, demand from AI data centers, estimated to consume more than 70 percent of global high-end memory production in 2026, will keep growing faster than production capacity.

For Polish consumers and businesses, this means that a planned purchase of a new computer, server or phone is better made sooner rather than later, prices are unlikely to fall in the coming months, and some manufacturers are already limiting the availability of cheaper models. For tech companies and hardware integrators, rising component costs mean having to renegotiate supplier contracts and face greater uncertainty in planning purchasing budgets for coming quarters.