AI has accelerated the memory market growth to such an extent that it will surpass conventional chip manufacturers in revenue by almost two and a half times.

New Perspective on the Chip and Memory Market

Contract semiconductor fabs typically do not disclose prices, but numerous leaks show that they consistently raise their service costs when demand is high. At the same time, memory price dynamics are growing so quickly that by year‑end its revenue will exceed contract manufacturing earnings.

TrendForce experts analyzed current trends in both segments and reached the following conclusion:

- Memory – total revenue will be $551.6 billion.
- Contract chip manufacturing – revenues will remain at $218.7 billion, but this will be a historical high for the industry.

Why the memory market is growing faster
TrendForce notes that the current “supercycle” in the memory segment will last longer and be more intense than the previous cycle (2017‑2019), when demand was driven by cloud computing. Now AI infrastructure is amplifying the shortage: servers require more DRAM, and there is a rising need for enterprise SSDs based on QLC NAND types. The key buyers remain large cloud providers investing in AI both for themselves and their customers. These buyers are not very price‑sensitive, so prices rise sharply when supply is tight.

Why contract chip manufacturing is slower
Revenue from contract manufacturing services grows significantly more slowly because expanding capacity requires huge capital investments. Currently 70‑80 % of available capacity uses mature process nodes (28–90 nm), and only 20‑30 % uses advanced technologies. Therefore price increases for high‑tech processes have limited impact on the industry’s overall revenue. In addition, contract manufacturers adjust prices less frequently than memory makers.

Difference in product mix
Memory has a more homogeneous product line, whereas contract fabs offer a range of process nodes from 28 to 90 nm. Memory production uses relatively simple tooling (photomasks), which allows faster payback on capacity expansion investments.

Thus, with current demand and price dynamics, the memory market will outpace contract manufacturing in revenue, while the cost growth for contract manufacturers will be more moderate due to capital barriers and a limited number of advanced processes.