Memory-chip giants have reported record results on the back of AI-driven price surges, yet their shares sold off, a split that captures a supercycle now balanced at a crossroads between real demand and priced-in perfection.
Record numbers, priced for perfection
Kioxia’s first quarter to June showed revenue up 415.5 per cent year on year and net profit up more than forty-five times, fuelled by AI-data-centre NAND with average selling prices up about 70 per cent. Samsung’s semiconductor unit supplied 99 per cent of group operating profit. SK Hynix posted record operating profit up more than fivefold, and Micron’s revenue rose 345.7 per cent. The driver is concentrated: cloud giants will spend more than 800 billion dollars on data centres in 2026, GPUs need high-bandwidth memory, and HBM competes with DRAM for the same capacity, lifting prices across the board.
Why the stocks fell
Despite the prints, shares dropped, with SK Hynix down as much as 54 per cent from its July peak, Samsung 42 per cent and Micron 33 per cent. The fear is that the profit boom came from price, not volume, and that the rally was already in the stock. TrendForce expects third-quarter DRAM contract prices up only 13 to 18 per cent and NAND up 10 to 15 per cent, a clear slowdown, while OPPO reportedly rejected Samsung’s third-quarter quote. A supercycle built on price hikes, not unit growth, can unwind as fast as it built if momentum slips.
The case for the bulls
The optimistic camp is not without backing. Wolfe Research argues there is not enough physical capacity to reach oversupply before 2028, UBS sees AI spending approaching 1 trillion dollars by 2027, and JPMorgan reads the recent deleveraging as nearly complete, opening a re-rating window. Morgan Stanley notes a split market, with DDR4, SLC and NOR memory rising on tight supply while mainstream parts soften. The supercycle is not ending. It is maturing into a market where reading the divergence matters more than betting the trend.
Read the original report (Sohu IT)
Translated and adapted from Sohu IT (it.sohu.com).