Recent research from CITIC SEC on the memory sector indicates that since February, stronger-than-expected performance and guidance from Kioxia, upward adjustments in NAND contract prices for the first quarter, and better-than-anticipated January-February results released by domestic module maker Biwin Storage have further confirmed the industry's sustained high prosperity. The firm continues to hold an optimistic view on memory demand exceeding expectations and anticipates that supply will fall short of demand until the first half of 2027. Key recommendations include memory module companies with strong short-term earnings momentum, memory manufacturers, and design firms closely aligned with manufacturers.
A review of February 2026 pricing shows that after a significant month-on-month increase in January, the rise in DRAM spot and contract prices slowed in February. According to Bloomberg, spot prices for mainstream DRAM chips ranged from a 3% decline to a 12% increase month-on-month, while contract prices for DDR5-8Gb and DDR4-8Gb rose by 4% and 8%, respectively. NAND Flash prices continued to climb rapidly in February, though the rate of increase moderated. Spot prices for mainstream NAND chips rose between 10% and 26% month-on-month, while contract prices increased by 37% to 67%. Module prices were largely flat month-on-month for DDR4/5 memory modules, while SSDs saw increases of 0% to 13%, and mobile storage rose 10% to 25%. Contract prices for DDR5 memory modules increased 4% to 18%, DDR4 prices remained stable, and SSD contract prices rose 6% to 18%. It is noted that due to high volatility in spot market prices and shorter contract negotiation cycles, price data from different sources may vary.
Looking ahead, TrendForce forecasts in March 2026 that traditional DRAM contract prices will rise 90% to 95% in the first quarter. In late February, South Korean media reported that Samsung Electronics and SK Hynix had notified customers of plans for another significant DRAM price increase in the second quarter of 2025. Additionally, Taiwanese media reported that SK Hynix issued a post-Lunar New Year price hike notice, indicating a 40% increase for DDR5 chips in the second quarter of 2026. For NAND Flash, due to strong demand from AI servers and a severe supply-demand imbalance, manufacturers are keen on raising prices. First-quarter contract price increases have been revised upward to 85%–90%, up from the previous forecast of 55%–60%. In the niche memory segment, Taiwanese manufacturers are gradually reducing production capacity for small- and medium-capacity NOR Flash, which is expected to tighten supply and improve the supply-demand balance. NOR Flash prices are projected to continue rising in the first half of 2026, with first-quarter increases exceeding 20% overall and higher gains for small- and medium-capacity products. For SLC NAND Flash, reduced supply from overseas manufacturers such as Micron, Kioxia, and Samsung is expected to drive price increases in the first half of 2026, potentially approaching those of mainstream TLC/QLC products.
Overseas manufacturers have provided their demand-side assessments. SK Hynix expects DRAM bit demand to grow over 20% year-on-year in 2026, with NAND bit demand increasing 15% to 20%. The company reports that DRAM and NAND inventories have dwindled to approximately four weeks, and demand from all customers will not be fully met in 2026. SanDisk anticipates data center bit demand growth exceeding 60% in 2026. Kioxia projects medium- to long-term NAND bit demand growth at a compound annual growth rate of around 20%, with long-term agreements with hyper-scalers already negotiated through 2027–2028. The company guided for fourth-quarter fiscal 2025 revenue growth of 55% to 72% quarter-on-quarter, surpassing market expectations.
Domestic memory manufacturer Biwin Storage expects January-February revenue of 40–45 billion yuan, representing year-on-year growth of 340% to 395%. Net profit attributable to shareholders is projected at 15–18 billion yuan, up 922% to 1,086% year-on-year, while adjusted net profit is estimated at 13.5–16.0 billion yuan. Excluding share-based payments, net profit is anticipated to be 15.3–18.3 billion yuan, exceeding market expectations.
Key risk factors include lower-than-expected AI capital expenditure from overseas cloud service providers, weakening consumer electronics demand, slower-than-anticipated memory price increases, intensified industry competition, technological innovation risks, and international trade friction.
The investment strategy reiterates a positive outlook on memory demand exceeding expectations, with the supply shortage expected to persist until the first half of 2027. Core recommendations include memory module companies with strong short-term performance potential and memory design firms closely associated with manufacturers.
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