In 2026, the cost of network security hardware may rise sharply as DRAM shortages hit firewall manufacturers, turning enterprise-grade protection into a premium asset rather than a baseline necessity.

The unexpected victim of the memory crisis: cybersecurity
The global DRAM shortage is no longer confined to PCs, smartphones, or data centers. It has reached an industry that rarely makes headlines in commodity discussions: network security hardware.
According to Wedbush analysts, the next-generation firewall (NGFW) market could face a significant cost shock in 2026 as memory prices continue to surge. Firewalls are memory-intensive systems — packet inspection, threat detection, encrypted traffic analysis, and AI-driven filtering all rely on large and fast DRAM pools.

When memory prices spike, firewall economics break

DRAM prices: the structural problem
The core issue is not a temporary supply hiccup but a structural shift in the memory market.
According to Korea Economic Daily, two major South Korean DRAM manufacturers are preparing to raise prices by up to 70% in a single quarter. This follows an already substantial 50% increase during 2025. If these trajectories hold, DRAM prices by mid-2026 could be roughly double year-on-year.
TrendForce confirms the trend: prices for standard DRAM modules have already jumped 55–60% in one quarter, signaling aggressive supply-side tightening.
This is not speculative pressure. It is a repricing of a critical component.

Why firewalls are especially exposed

Firewalls differ from general-purpose servers in one key way: memory is not optional or easily substituted.

Next-generation firewalls require:
High-throughput packet buffering
Real-time deep packet inspection
SSL/TLS decryption at scale
AI/ML-based threat classification

All of these functions scale linearly — and sometimes exponentially — with memory capacity.
Reducing DRAM is not a viable option without degrading performance or security guarantees. This makes firewall vendors unusually sensitive to memory inflation.

Who gets hit hardest

Wedbush highlights three vendors as the most exposed:
Fortinet’s financials already reflect pressure. Gross margin declined from 83.2% to 81.6% year-over-year, with management guiding 79–80% for the next quarter.
This suggests cost inflation is already outpacing pricing power.
Palo Alto Networks saw gross margins fall from 78% to 76.9%.
However — and this matters — Wedbush notes that Palo Alto pre-purchased large 
Analytical conclusion: this buffer may delay margin compression, not eliminate it.
Check Point chose a more direct strategy: a 5% price increase to offset higher memory costs.
According to Wedbush, this has softened near-term impact, but the real stress point is expected in 2026, when NGFW infrastructure rollouts accelerate.
IDC data places Palo Alto and Fortinet as global leaders in firewall revenue and market share, with Check Point ranking fourth after Cisco. In other words, this is not a niche problem — it affects the core of the market.

Why 2026 is the tipping point

The cost shock is not fully visible yet because:
Existing memory inventories are still being consumed
Long-term supply contracts delay spot-price impact
Hardware refresh cycles lag component markets

But by 2026, three forces converge:
DRAM repricing fully flows into procurement
Enterprises upgrade to more memory-hungry NGFWs
AI-driven security workloads become standard

At that point, firewall pricing may reflect component reality rather than historical margins.

What this means for buyers

For enterprises and brokers alike, this is not just a vendor problem.

Likely consequences:
Higher upfront costs for on-premise firewalls
Increased shift toward subscription-based and cloud security models
Longer hardware refresh cycles
Security becoming a CAPEX decision again, not a routine IT expense
Analytical assumption: smaller firms may delay upgrades, increasing systemic cyber risk — a paradox where higher security costs reduce overall security.

Market implications

From a market perspective, this trend reshapes valuations and expectations:
Hardware-heavy security vendors face margin compression risk
Companies with strong software and SaaS mixes may outperform
Memory suppliers gain pricing power far beyond traditional cycles

As one industry analyst summarized privately:
“When memory doubles in price, security stops being infrastructure and starts being strategy.”

Firewalls are quietly becoming luxury assets. Not because they are optional, but because the economics behind them are changing.
By 2026, the cost of protecting networks may no longer scale with threats — it may scale with DRAM.

Written by Ethan Blake
Independent researcher, fintech consultant, and market analyst.
January 14, 2026

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