[Last updated 16:56 29/01/2026]

To Whom It May Concern,

Following briefings from our vendor partners and extensive media coverage, OCF feel it is important to be transparent with our clients about the current challenges in the DRAM (Dynamic Random-Access Memory) market, as these factors are having a significant impact on availability as well as our ability to maintain pricing for any extended period.

The primary issue is a severe supply shortage driven by explosive demand from the Artificial Intelligence (AI) sector, coupled with a fundamental shift in manufacturer focus.

THE AI BOOM & INSATIABLE DEMAND

Hyperscale AI Demand: The greatest driver of the shortage is the massive, sustained demand for high-performance memory (specifically High Bandwidth Memory, or HBM, and high-density DDR5) required for AI training and datacentres (particularly Cloud Service Providers).

High-Volume Consumption: AI servers require significantly more DRAM than traditional servers, consuming a disproportionate share of global memory output. Major chip suppliers are struggling to fulfil all orders, with some reporting fulfilment rates as low as approximately 70%.

SUPPLY CONSTRAINTS & MANUFACTURING SHIFT

Capacity Reallocation: The few major global DRAM manufacturers are prioritising their limited production capacity toward highly profitable AI-focused products (HBM and advanced DDR5).

Impact on Standard DRAM: This strategic shift means less manufacturing capacity is allocated to standard consumer and enterprise memory (such as DDR4 and even non-AI server DDR5 kits we typically quote), leading to tighter supply and increased price pressure on those components.

Legacy Shortages: Older, but still widely used, memory types (such as DDR4) are experiencing severe shortages and disproportionately large price increases as production lines are phased out or converted to newer technologies.

Not just DRAM: In recent weeks we have seen shortages extend beyond memory products with CPU's, Adapters, SSD's and HDD's all seeing significant price increases and extended lead times. Even ancillary items such as rack infrastructure, CPU Coolers and Power Supplies haven't been immune to price rises.

PRICE VOLATILITY AND OUTLOOK

Surging Costs: Contract prices for DRAM have climbed sharply throughout the year, with year on year increases reported at over 170% in some segments. Manufacturers have been enforcing steep quarter on quarter price increases. Additionally CPU's, Adapters, SSD's and HDDs are also seeing significant price increases.

Unstable Future Pricing: Given the acute supply-demand imbalance and manufacturers’ firm control over capacity, we are seeing extreme price volatility. This makes it impossible for Value Added Resellers to secure and hold pricing for more than a very short window, as underlying component costs can increase significantly within weeks.

WHAT DOES THIS MEAN FOR OUR CUSTOMERS?

In short, unprecedented demand from the AI sector has diverted manufacturing focus, creating a global shortage that is affecting:

• Availability / Lead Times
  Systems that were previously showing lead times measured in weeks are now, in some cases, showing lead times of many months.
• Pricing
  Costs are increasing with little notice, impacting server and storage costs across all vendors and manufacturers. As a result, customer budgets are under additional pressure, and OCF is unable to hold committed pricing for extended periods due to this volatility.

WHAT CAN OCF DO TO HELP ITS CLIENTS?

OCF will remain transparent with our customers regarding the impact of these market conditions and will work collaboratively with our vendors and clients to provide solutions that we can fulfil. For example, we may recommend minor configuration changes that could significantly improve lead times.

We will also endeavour to hold pricing for as long as possible for our clients. When we are unable to do so, we will communicate this openly, passing on only our cost increases. We do not view this as an opportunity to profit from the challenges currently facing our industry.

WHAT CAN OUR CLIENTS DO?

• Place orders early - With disruption expected to continue into 2027, it is likely that pricing and lead times will continue to worsen for the foreseeable future.
• Remain flexible with configurations - Where appropriate, specify an overall requirement (e.g. 200TB of flash) rather than fixed component counts (e.g. 9 × 24TB SSDs) to allow OCF to propose options we can reliably supply.
• Communicate with us - Discuss options early and notify our team of upcoming orders so we can work to secure stock and lock down pricing with our vendor partners.

Please bear with us as we navigate this latest challenge facing our industry. Should you have any questions, please feel free to contact myself or your OCF Account Manager.

Yours sincerely,

Andrew Dean
Sales Director, OCF Ltd