Geopolitical Tensions and AI-Driven Demand in the Global DRAM Supply Chain: An Investigation into the Nature of Semiconductor Shortages and Price Volatility

The dynamic random-access memory (DRAM) market is going through a complete reversal of recent trends, shifting from a market of plenty and negative margins to one of the most rapid increases in contract pricing in the history of semiconductor memory, as reported contract pricing for commodity DRAM rose by about 700 percent over four years and by over 170 percent year-over-year in one quarter of 2025. This paper addresses two questions. First, it asks how much of the recent DRAM shortage is being caused by supply-chain disruption as opposed to strategic supply management by a small group of manufacturers. Secondly, it addresses the impact on DRAM demand from the swift adoption of artificial intelligence (AI) and whether that acceleration is a direct driver of the price increase. Using facts from industry sources, corporate disclosures, market research reports, and a June 2026 antitrust class action filed in the Northern District of California, the paper suggests that the lack of supply is as much a true structural dislocation caused by demand as it is an ‘amplified’ supply disruption. It also explores as a competing hypothesis the notion that state-backed Chinese capacity growth has been a distorting force in the market and concludes that existing evidence is more supportive of recognising China as a market opportunist than a builder of scarcity.