In the past six months, global memory chip prices have continued to rise. Especially in the last month, the news of price increases has become more and more intensive. Major manufacturers such as Samsung Electronics Company of South Korea and SanDisk of the United States have recently notified customers to adjust their quotations, and spot market prices have also risen rapidly in a short period of time.
In the past month, chip maker Micron's share price has risen by about 60%, and Kaixia and SanDisk's share prices have both risen by more than 100%.
In late September, South Korea's Samsung Electronics issued a fourth-quarter price hike notification to major customers, planning to raise some DRAM prices by 15% to 30% and NAND flash prices by 5% to 10%. U.S. chip manufacturer Microsystems suspended part of the storage chip offer in September and resumed the offer, the new price generally increased by about 20%. Another storage chip giant, Flash, has also raised the NAND flash offer in September, with a scale of about 10%, consumer and enterprise products are involved.
With the rapid development of generative AI in recent years, the global demand for high-bandwidth memory HBMs has increased dramatically. For example, OpenAI's data center project called Stargate is expected to require up to 900,000 wafers per month, potentially accounting for 40% of total global DRAM production.
With the production capacity of storage chips gradually inclined to the direction of high profits, high added value, such as computer cards, servers, traditional storage categories such as DDR4 instead face supply tension. industry analysts, because DDR4 production capacity is gradually marginalized, plus downstream personal computers and some industrial equipment still have a stable demand, short-term market supply and demand structural imbalance, driving DDR4 prices abnormally up.
The sharp fluctuations in the spot market also reflect this problem. According to data compiled by Jibang Consulting, the average spot price of mainstream DRAM chips has increased by more than 5% for three consecutive weeks. Especially for DDR4, which has tight supply, the price has increased by nearly 30% in less than a month, and the cumulative increase in half a year has exceeded 200%.
In addition, the wave of price increases by upstream manufacturers has gradually spread to the midstream and downstream markets. ADATA, a major storage module manufacturer, recently announced that it will stop DDR4 quotations and give priority to DDR5 and NAND flash memory supplies to major customers.
The capital market has given direct feedback on the recent changes in the memory chip market, and the stock prices of many manufacturers have continued to set record highs. In the past month, Micron's stock price has risen by about 60%, and Kioxia and SanDisk's stock prices have both risen by more than 100%. Analysts pointed out that as demand for AI computing continues to be strong, and storage capacity is concentrated in the high-end direction, this round of price increases may continue in the short term.
Foreign funding to boost
Samsung Electronics and SK Hynix shares jump
As the global leader in storage chips, SK Healey and Samsung Electronics have been highlighted in this round of price hikes.
With the rapid development and widespread application of AI technology and the increasing demand for AI infrastructure such as AI servers and data centers, the supply of memory chips has been tight recently, and the global memory chip market is experiencing an unprecedented price storm. According to South Korean industry news, Samsung Electronics may increase the prices of memory and flash memory products in the fourth quarter, with some products increasing by about 30%. There are also observations that SK Hynix will also join the ranks of price increases in the near future.
Due to the high expectations for market prospects and after-pricing performance climbing, the recent Samsung Electronics and SK Healyx two companies share price can be called a high track. As of the final trading day (2th) before the festival, SK Healyx share price has risen about 47% since September, the company's market value has broken 288 trillion yuan (approximately RMB 1.46 trillion); in the same period, Samsung Electronics share price cumulative increase of about 28%. The two companies in the upward round is mainly benefited by the pursuit of foreign investment, the data show that the shareholding ratio of foreign investment in SK Healyx and Samsung Electronics in the end of September and early October increased to the highest level since this year.
Recently, South Korean brokerages have raised the performance prospects of Samsung Electronics and SK Hynix, generally predicting that the operating profits of SK Hynix and Samsung Electronics will exceed 10 trillion won in the third quarter, which may become the highest level in the history of SK Hynix. It is understood that the two companies will release their third-quarter results after the holiday. The actual impact of this round of chip price increases on the company's revenue and profits has become the biggest focus of attention in the industry.
It is worth noting that SK Healycs and Samsung Electronics have an absolute influence in the field of high value-added chips such as HBM high bandwidth chips worldwide. SK Healycs has built the world's first HBM4 mass production system, Samsung Electronics is also accelerating the expansion of the factory, and is vigorously preparing for HBM4 mass production. At the same time, the two companies also actively exchanged with international renowned AI companies, and subsequently in the beginning of this month and OpenAI signed an intention to build a global AI infrastructure, and reached a strategic partnership.
Industry analysts believe that in the future, the two companies may supply chips and other equipment for OpenAI's "Stargate" project. Due to its huge scale, it is expected that this cooperation may become a new engine for the company's stock price and performance to further rise.
Under the craze of artificial intelligence
The memory chip industry will usher in a "super cycle"
From the perspective of the industry, Morgan Stanley's latest research report predicts that under the boom of artificial intelligence, the storage chip industry is expected to meet a "super cycle". in the context of high market demand, the storage chip industry has also begun to show a series of chain reactions such as supply not in demand, rising prices, shifting order patterns.
Chips are a big concept. To drive the operation of artificial intelligence models, on the one hand, logic chips responsible for operations are needed, such as processors such as CPUs and GPUs; on the other hand, memory chips that can store and call data at high speed are also indispensable. Recently, Morgan Stanley's latest research report predicts that under the artificial intelligence boom, the memory chip industry may usher in a "super cycle."
Memory chips are mainly divided into two categories: one is dynamic random access memory DRAM, which is similar to a notebook of the brain and has a large capacity, which can be used to temporarily save and call data; In the category of DRAM, there is also a high-performance chip in a special packaging form, a high-bandwidth memory HBM. It is like the short-term memory of the brain and is extremely fast. It is specially used for AI training and reasoning, so it is also particularly popular. market sought after; The second category is NAND flash memory, which is similar to the brain's archive, that is, long-term memory, and is responsible for storing massive data and model parameters.
For a long time, the storage chip has actually been the "lack of light ring" in the semiconductor industry, in comparison, NVIDIA, AMD and other companies designed logic chips are more concerned with the market, but today the situation is quietly changing.
The boom of generated AI has led to a surge in demand for high-capacity, high-speed chips, and the two leading companies in storage of chips – Samsung and SK Healy are receiving a lot of orders.
The storage chip industry has also begun to see a series of chain reactions such as unsatisfactory supply, rising prices, shifting order patterns. Morgan Stanley predicts that NAND flash storage will have a supply gap of up to 8% by 2026.
Morgan Stanley also expects the price of dynamic random access memory DRAM to increase by about 9% sequentially in the fourth quarter of this year. As a result, Morgan Stanley also upgraded the rating of the Korean semiconductor industry to "attractive" and upgraded SK Hynix's rating from "hold" to "overweight".
In the most sought-after high bandwidth memory HBM field, each HBM chip now needs to be customized for a specific AI GPU, and customers need to order a year in advance, with contracts usually for a year. This is in sharp contrast to traditional DRAM chips, which can be purchased at any time, even delivered on the same day, and is easy to replace suppliers. The new ordering model not only improves supply stability but also significantly enhances storage manufacturers' pricing capabilities.
Thanks to the market demand for HBM chips, SK Hynix recently surpassed Samsung in related revenue for the first time, breaking the long-standing industry structure. Most analysts believe that HBM will continue to dominate the memory chip market in the next five years. However, some analysts reminded that memory chips are still a strong cyclical industry in nature, and prices are highly dependent on changes in supply and demand. In the future, we need to be alert to potential technology substitutions and demand fluctuations.