The memory market isn't correcting - It's reorganising

Author: Andrew Czuczwa, Market Research Manager at Fusion Worldwide

The memory market isn’t correcting, it’s reorganising. According to Claus Aasholm, Founder of Semiconductor Business Intelligence, the long-standing equilibrium between supply, demand, and pricing has dissolved.

For procurement teams and electronics manufacturers, this isn't just market analysis; it's a signal that decade-old sourcing assumptions no longer hold.

Aasholm's research is closely followed by suppliers, OEMs, and investors because it focuses on observable behaviour: utilisation rates, gross margins, capital expenditure timing, and product prioritisation. His analysis cuts through market noise to identify when shifts in manufacturer incentives signal lasting change rather than cyclical volatility.

In a recent conversation with Andrew Czuczwa, Market Research Manager at Fusion Worldwide, Aasholm outlined why current conditions represent reorganisation, not another correction. Czuczwa tracks early sourcing and qualification patterns across industrial, automotive, consumer, and data-centre markets, providing real-time visibility into how buyers adapt to shifting supply signals.

When analyst insights and buyer behaviour converge, the signal is clear: this isn't a cycle. It's a new operating environment.

That's the moment the market is in now.

The Demand Model Has Changed

For decades, memory markets have self-corrected. When DRAM prices spiked, enterprises postponed upgrades, device makers delayed refreshes, and pricing eased. Demand elasticity kept supply and demand in check.

That dynamic no longer exists.

"The answer is always AI. I don't know what the question is, but it is always AI. That is what drives everything at the moment," said Claus Aasholm, Founder, Semiconductor Business Intelligence

AI infrastructure buildouts don't pause when component pricing rises. They follow deployment roadmaps tied to competitive positioning and model training schedules. This removes the historical mechanism that once cooled, overheated markets—buyers who could afford to wait simply walked away until prices normalised.

For the electronics industry, Aasholm argues, this changes the equation entirely. Historical pricing curves are no longer predictive. Waiting for memory to "come back down" is now speculation, not strategy based on cycle patterns.

Supply Didn't Expand When Pricing Recovered

In past recoveries, memory makers quickly ramped production once margins improved. This time, expansion lagged far behind demand.

"This last down cycle was the deepest the memory companies have ever seen. They had negative gross margins. It was brutal," said Claus Aasholm, Founder, Semiconductor Business Intelligence

After the deep losses of 2022–2023, producers prioritised stability over scale. Capital spending rose cautiously, driven by discipline, not demand.

According to Aasholm, the constraint is strategic, not accidental. Memory manufacturers emerged from the downturn with a different playbook—one that treats tight supply as a feature of disciplined capital allocation, not a problem to solve.

Tight Supply Is Now Part of the Business Model

Memory makers have redefined profitability.

"This is a margin game now, not a volume game. They like tight markets. They like saying no," said Claus Aasholm, Founder, Semiconductor Business Intelligence

Tightness now sustains profitability and discipline. With lead times stretching and allocations announced earlier than ever, manufacturers are signalling control, not constraint. Unless competitor behaviour or demand destruction shifts incentives, oversupply is unlikely to return.

The Financial Data Confirms the Shift

According to Aasholm, the clearest indicator appears in pricing behaviour relative to shipment volume.

"Micron's margin on non-AI products increased by around 18 percent with shipments flat. Customers are paying more for exactly the same shipments. That tells you there is no price elasticity anymore," said Claus Aasholm, Founder, Semiconductor Business Intelligence

Aasholm points to Nanya Technology's recent quarterly results as further evidence:

• Revenue up approximately 80% quarter over quarter
• Shipment volume flat
• Utilisation at full capacity

Pricing is rising without supply growth. This is not how elastic markets behave. It's what structural tightness looks like when demand cannot defer, and supply will not expand to meet it.

HBM Is Consuming Manufacturing Capacity

High-Bandwidth Memory (HBM) is now the memory market’s profit engine. As AI accelerator demand soars, each HBM generation consumes more manufacturing capacity.

"HBM3, then HBM3E 8 high, now 12 high, and soon HBM4. Each generation needs more capacity to make the same number of bits. And there is only one place to take it from. DDR5 and DDR4," said Claus Aasholm, Founder, Semiconductor Business Intelligence

About Fusion Worldwide

Fusion Worldwide is the preeminent open-market distributor of electronic components and products. We source, inspect, test, and deliver a broad range of components to a large and diversified customer base that includes OEMs, CMs, and ODMs across various verticals. Founded in 2001, Fusion is headquartered in Portsmouth, New Hampshire, and maintains offices and quality centers in major manufacturing hubs around the world.