Bolstered by analysis from Mellorius Research suggesting robust demand for memory chips could persist until the late 2020s, shares of industry leaders Micron Technology and SanDisk Corp. surged again on Monday, extending a prolonged upward trend. The artificial intelligence sector has fueled a global shortage of microchips, leading to significant gains in both performance and stock prices for major memory manufacturers. High Bandwidth Memory (HBM), which is directly integrated into top-tier graphics processing units from companies like Nvidia and Advanced Micro Devices, serves as core hardware in mainstream AI data centers worldwide. Analyst Ben Reitzes of Mellorius upgraded Micron Technology's stock rating to "Buy" on Monday, projecting a potential 41% upside over the next 12 months. Micron's shares climbed 5.6% in a single day, contributing to an impressive cumulative gain of over 550% in the past year. Reitzes stated, "AI is reshaping the industry landscape, driving sustained resilience in corporate profit margins and market demand. The market will ultimately be willing to pay a higher premium for this稀缺 advantage." He also anticipates that Nvidia will increase its investments in the memory chip sector in the near term. "The AI industry cycle is still in its early stages, and demand for memory chips is at an unprecedented high." Micron Technology's stock price recently reached a record high, pushing the company's market capitalization close to $600 billion. SanDisk Corp.'s shares rose 8.1% on Monday, with a staggering increase of over 3000% in the past year, elevating its market value above $157 billion. Reitzes forecasts an additional 36% rise for the stock over the next twelve months. Bernstein analyst Mark Newman, who maintains a "Buy" rating on SanDisk, commented, "The data speaks for itself. Driven by soaring memory chip prices, corporate earnings expectations have been significantly revised upward." High Bandwidth Memory is manufactured by stacking multiple layers of Dynamic Random-Access Memory (DRAM), enabling high-speed temporary data storage essential for efficient parallel computing in graphics cards. The world's three largest memory chip producers—Micron Technology, Samsung, and SK Hynix—have shifted substantial DRAM production capacity to HBM, directly causing a shortage of general-purpose memory and a sharp increase in prices. According to data from market research firm Canterpo, the DRAM market has achieved sequential growth of 30% for two consecutive quarters, propelled by rising memory chip prices. The increase in chip costs is being passed on to consumers, leading to higher prices for electronic products. Gartner predicts that the average selling price of personal computers will rise by 17% this year. Currently, the price of built-in solid-state drives in computers is two to three times higher than it was in December of last year. SanDisk Corp. is a leading global manufacturer of solid-state drives, whose core component is NAND flash memory—a storage medium that retains data permanently even when power is off. With surging data storage demands from AI servers, NAND flash memory is also experiencing tight supply and soaring demand. The supply-demand imbalance is compelling buyers to enter into long-term supply agreements, with contract durations extending to three or even five years. Both SK Hynix and Micron Technology have indicated that major internet and technology firms are increasingly inclined to sign long-term supply contracts to secure inventory and gain a competitive edge. For instance, chip design company Broadcom has already secured its memory chip supply through 2028. Newman noted, "Memory manufacturers are also willing to sign long-term contracts to stabilize order demand. Stable long-term orders are particularly crucial when companies plan to expand production capacity. The entire cycle, from groundbreaking to operational status for a new chip fabrication plant, is approximately two and a half years." Regarding capacity expansion, Micron Technology plans to invest $24 billion to significantly expand its NAND flash memory production base in Singapore, while also constructing new large-scale chip plants in New York and Idaho. SK Hynix has broken ground on its first U.S.-based memory packaging facility in Indiana and is building new facilities in South Korea to boost both production and packaging capacity. SanDisk Corp. is scheduled to release its latest quarterly earnings report next week.
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