Memory chip prices surged by 400%! With giants halting production of old models, Micron Technology and Sandisk directly benefit from the global buying frenzy.

French bank BNP Paribas stated that with artificial intelligence (AI) driving the memory industry into a "historical upturn cycle," Micron Technology, Inc. (MU.US) and Sandisk (SNDK.US) are expected to continue benefiting. Analyst Karl Ackerman from the bank stated in a client report, "With consumer-grade DRAM and NAND TLC spot prices rising by 408% and 165% year-on-year in November, we believe DRAM and NAND are entering a historical upturn cycle that could last until 2026. We remain optimistic about the memory and storage supply chains, but companies with a higher proportion of data center business will perform better." After a detailed analysis, Ackerman stated that the average selling price of DRAM is expected to increase by 35% in the fourth quarter and by 10% in the first quarter of 2026. He added that recent research shows that this is mainly due to continued tight supply. The situation is similar for NAND, with prices expected to rise by 15% in the fourth quarter and by 7% in the next quarter. Ackerman explained, "Since 1999, the average upturn cycle for DRAM has lasted 8 months, with average selling prices increasing by 53% from trough to peak, while the average upturn cycle for NAND usually lasts 6 months, with average selling prices increasing by 40%. The current upturn cycle for DRAM has entered its 5th month, with average selling prices rising by 55% from the trough; the upturn cycle for NAND has entered its 4th month, with average selling prices rising by 51% from the trough. However, we expect this current upturn cycle to be more sustainable for both DRAM and NAND. We observe significant spot/contract price differences: DDR4 at 45%, DDR5 at 89%, 256Gb TLC at 47%, and 512Gb TLC at 9%, indicating that prices will continue to rise." The "super cycle" of memory chips has arrived! Shortages may continue until 2026 After ChatGPT was released in November 2022, causing a boom in generative AI, and a global trend towards building AI data centers, memory chip manufacturers are starting to allocate more capacity to high-bandwidth memory (HBM) chips. Competition from Chinese rivals is intensifying, prompting Samsung and SK Hynix, which control around 70% of the global DRAM chip market, to accelerate their shift to high-end chips. These companies have been adjusting their strategies since early 2025, gradually reducing and planning to completely stop DDR4 memory chip production by the end of 2025 or early 2026, redirecting capacity to more profitable and technically advanced products such as DDR5 and HBM. Morgan Stanley predicts that tech giants including Alphabet Inc. Class C, Amazon.com, Inc., Meta, Microsoft Corporation, and CoreWeave will invest $400 billion in artificial intelligence infrastructure this year. This AI boom coincides with a new upgrade cycle for traditional data centers and personal computers. Analysts point out that this, coupled with better-than-expected smartphone sales, is exacerbating the shortage of non-HBM memory chips and driving up their prices. For example, the spot market price of 4GB DDR4X RAM has increased from a low of $7 per chip at the beginning of the year to over $30 per chip in mid-November, an increase of 3-4 times; and for 64G eMMC flash memory, the price has risen from $3.2 per chip at the beginning of the year to over $8 per chip recently, nearly 1.5 times. In addition, with the increasing demand for eSSD in overseas AI servers, NAND flash memory prices have also started to rise significantly following DRAM chips. As the supply of ordinary memory chips tightens, the global memory chip industry seems to be intensifying its entry into what many analysts call a "super cycle," with equipment manufacturers frantically hoarding memory chips. Tobey Gonnerman, President of semiconductor distributor Fusion Worldwide, stated, "Demand has surged in the past one to two months. The market changes are truly remarkable. Panic buying behavior is intensifying and will continue to escalate. Customers are generally adopting a strategy of ordering double or triple the usual amount, mirroring the situations during previous shortages."