The shortage in the memory market has driven up the shares of chip suppliers. Is it too late to buy them?
Analysts suggest that the supercycle of growth for chipmakers could last until 2027.
Shares of the world's largest memory chip manufacturers rose on Monday, January 5, as investors bet on further price increases for their products due to a global shortage caused by demand for artificial intelligence infrastructure. Samsung and Hynix ended trading on the Korean Stock Exchange with gains of 7.5% and 3%, respectively, while shares of US memory chip manufacturer Micron hit a record high during the session.
Details
Shares of memory chip manufacturers Western Digital and Micron reached historic highs during trading on Monday, January 5, after which they lost momentum and fell into negative territory. Applied Digital's stock jumped nearly 7%. South Korean stocks SK Hynix and Samsung ended the day up nearly 3% and 7.5%, respectively.
In 2025, Micron shares soared 240%, significantly outperforming the chipmaker index, which gained 42%, and posting the third-best result in the S&P 500 index. Samsung shares more than doubled in price over the past year, while SK Hynix shares rose by a quarter.
What is happening in the memory market
The market for memory chips used in consumer electronics, PCs, AI processors, and data centers has faced an "unprecedented" shortage, Samsung co-CEO Roh Tae-moon said in an interview with Reuters. Due to high demand for AI computing, memory chip manufacturers are redirecting their production lines to produce HBM modules—high-speed memory for AI servers. As a result, supplies to almost all other segments are being reduced, including flash memory used in USB drives and smartphones.
Analytical companies IDC and Counterpoint, whose reports are cited by Reuters, predict a decline in the global smartphone market next year, as a shortage of memory chips threatens to drive up prices for these gadgets. Thus, the agency emphasizes, this is a long-term trend.
According to research firm TrendForce, prices for certain categories of memory chips have more than doubled compared to February last year. This has attracted traders who are counting on the rally to continue, Reuters reports.
Micron CEO Sanjay Mehrotra said last month that he expects the shortage to continue beyond 2026. The memory chip market is traditionally highly cyclical, alternating between sharp declines and periods of rapid growth with high price volatility, Reuters notes. Analysts at Morningstar and JPMorgan believe that the current upswing, increasingly referred to as a "supercycle," could continue until 2027.
This article was AI-translated and verified by a human editor
