The wave of price increases for memory chips is intensifying. According to the latest reports, leading memory chip manufacturer SK Hynix has indicated that memory chip prices are expected to continue rising throughout the year, driven by strong demand from artificial intelligence (AI) clients and limited supply growth. The company also revealed that none of its customers have been able to have their memory demands fully met this year.
Spurred by the positive news of rising prices, memory chip concept stocks experienced a broad surge on Friday. In US trading, SanDisk Corp. rose over 4%, while Micron Technology gained more than 2%. SK Hynix saw its shares jump over 6%, reaching a new all-time high. This follows reports that Samsung Electronics is engaged in pricing negotiations for its latest generation of AI memory chips, with prices potentially up to 30% higher than the previous generation.
Chip Giant: Prices Will Continue to Rise At a recent virtual investor conference, SK Hynix sent a strong signal: the memory chip industry has fully entered a seller's market. The company provided clear guidance on this year's price trajectory, forecasting sustained price increases for memory chips due to robust AI-driven demand and constraints on supply growth.
The current supply-demand tension has reached a multi-year high. SK Hynix informed Goldman Sachs that "none of its customers will be able to fully satisfy their memory demand this year."
Regarding the supply side, SK Hynix pointed out that the entire industry is constrained by a shortage of clean room space, physically limiting supply growth. Customers are acutely aware that memory production capacity cannot be significantly increased in the short term. Consequently, they understand that placing duplicate orders will not result in greater allocation but will instead further drive up prices.
From an inventory perspective, server customer inventories have reached healthy levels, while inventories for PC and mobile customers are showing a declining trend. More critically, SK Hynix itself, as a key supplier, is operating with extremely lean inventories. The company stated that its inventories for both DRAM and NAND are at normal levels, approximately four weeks of supply, and it anticipates this level will continue to decrease throughout the year.
Furthermore, regarding the market's high focus on HBM (High Bandwidth Memory), SK Hynix clearly stated that production capacity allocation for 2026 is already finalized. Its HBM supply for 2026 is completely sold out, with production plans allocated to meet customer demand. SK Hynix admitted that, given the current production schedule, it is difficult to make meaningful adjustments to the production lines for HBM and standard DRAM in 2026.
Due to the extreme tightness in supply and demand for standard DRAM, SK Hynix has gained more leverage in negotiations, solidifying its pricing power. In this context, the company revealed it is "discussing multi-year long-term contracts with major customers." SK Hynix believes this tight situation "could lead to more favorable terms for its HBM business in 2027."
Additionally, SK Hynix maintains a disciplined approach to capital expenditure. The company confirmed that this year's capital spending will exceed last year's but emphasized it will "continue to uphold capital expenditure discipline." Investment priorities are very clear: a core focus on HBM and standard DRAM. For the NAND business, although some investment has resumed (primarily for the transition to 321-layer 3D NAND), its share of total capital expenditure will remain stable (expected to stay in the low double-digit percentage range), with no blind expansion.
Memory Chip Concept Stocks Rally Broadly On February 20th, US memory-related stocks surged across the board. SanDisk Corp. jumped 4.65%, and Micron Technology rose over 2%. During Asian trading hours, SK Hynix soared 6.15%, once again setting a new record high, while Samsung Electronics also hit a new closing high. Memory chip concept stocks in Hong Kong also showed modest strength, with Montage Technology rising over 8% at one point and GigaDevice Semiconductor increasing nearly 4%.
Reports that day indicated that memory chip giant Samsung Electronics is negotiating prices for its newest generation of AI memory chips, with prices potentially up to 30% higher than the previous generation. Charu Chanana, Chief Investment Strategist at Saxo Bank, commented that reports regarding Samsung's HBM4 again highlight the industry's "pricing power," stating, "This shows the AI memory chip market supply remains tight, and simultaneously, Samsung believes it has regained some pricing say in the high-end market."
Market research firm TrendForce predicts that in the first quarter of 2026 alone, prices for DRAM and NAND flash memory are expected to rise by 13-18% and 10-15%, respectively, for contract prices.
Google DeepMind CEO Demis Hassabis recently discussed the global "memory shortage" in an interview, noting that the "entire supply chain" for memory chips is constrained and that hardware-level challenges "are limiting a lot of [AI] deployment."
Intel CEO Pat Gelsinger also recently warned that the bottleneck for AI development has shifted from "computing power" to "memory" and broader infrastructure systems. He stated plainly that the memory shortage issue is not expected to ease before 2028.
Bernstein semiconductor industry analyst Mark Li cautioned that memory prices are rising in a "parabolic" fashion. While this will bring substantial profits to Samsung Electronics, Micron Technology, and SK Hynix, other sectors of the electronics industry will pay a heavy price in the coming months.
Counterpoint Research suggested that rising memory costs could make low-end devices economically unviable for electronics companies. As margins shrink, some low-priced smartphones might exit the market entirely.
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