Binance: AI memory squeeze could keep inflation, rates high

Binance Research warns that surging demand from artificial intelligence data centers over the past year has driven DRAM prices roughly sixfold, creating a memory supply squeeze that could keep inflation and interest rates elevated.

AI-focused servers, High Bandwidth Memory (HBM) and enterprise storage now take a growing share of output that once went to smartphones and personal computers, tightening markets for DRAM and NAND flash.

A recent U.S.-Iran agreement reopened the Strait of Hormuz and pushed oil prices down about 4%, easing some energy-driven inflation. The report notes memory shortages are a separate, persistent pressure.

New fabrication plants typically take more than two years to build and ramp. Binance Research projects roughly 30% memory capacity expansion by 2027 but still expects PC memory supply to fall about 15% short of demand and smartphone memory to trail by about 12%.

The report estimates a DRAM undersupply near 17% through 2026 and warns NAND shortages could last into 2028.

Samsung, SK Hynix and Micron control about 90% of DRAM production and all HBM output. Major cloud providers are securing capacity with multiyear contracts, limiting available spot supply.

The report called attention to structural constraints and added, ‘There is no near-term policy fix.’

Binance Research estimates the direct effect on headline consumer price inflation is modest, adding roughly 0.10 percentage points to the Consumer Price Index, because consumer electronics have small weights in the CPI basket. The report says higher memory costs can raise corporate expenses, increase cloud and enterprise bills, slow product refresh cycles and lead device makers to reduce specifications.

The firm warned that persistent chip-driven inflation may delay interest-rate cuts and could revive discussion of hikes, which would tighten liquidity and weigh on risk assets in the near term.

The report noted bitcoin traded near $65,700 and had fallen about 17% over the past month, and added, ‘Bitcoin and assets like it don’t get cheaper in a world of persistent, supply-driven inflation. They get more relevant.’

Whether markets fully reprice the risk depends on how quickly memory supply catches up with AI-driven demand. Until new capacity comes online and supply constraints loosen, the report says higher memory costs will remain a structural input to inflation and financial conditions.