All sectors surge! Major positive news for chips! Chip giant: Prices will continue to rise

The surge in storage chip prices is intensifying.

According to the latest news, memory chip giant SK Hynix stated that driven by strong demand from AI customers and limited supply growth, storage chip prices are expected to continue rising throughout the year. The company also revealed that no customer this year has been able to fully meet their demand.

Buoyed by the positive news of price increases, storage chip concept stocks surged across the board on Friday, with SanDisk jumping over 4%, Micron Technology rising more than 2%; SK Hynix soared over 6%, hitting a record high. Previously, there were reports that Samsung Electronics was negotiating pricing for its latest generation AI storage chips, with prices up to 30% higher than the previous generation.

Chip Giants: Prices Will Continue to Rise

At the latest virtual investor meeting, SK Hynix sent a strong signal: the storage chip industry has fully entered a seller’s market.

SK Hynix provided a very clear outlook for this year’s price trend: driven by strong demand from AI customers and limited supply growth, storage chip prices are expected to keep rising throughout the year.

The current supply-demand tension has reached a high point in recent years. SK Hynix disclosed to Goldman Sachs, “No customer this year has been able to fully meet their storage needs.”

Regarding supply, SK Hynix pointed out that the entire industry is constrained by a lack of clean room space, with supply growth limited by physical capacity. Customers are well aware that short-term storage capacity cannot be significantly increased. Therefore, they realize that repeated orders will not bring more allocation but will instead push prices even higher.

From an inventory perspective, server customers’ inventories have reached healthy levels, while inventories for PC and mobile customers are declining.

More critically, SK Hynix’s own inventory on the supply side is extremely thin.

The company stated, “Our inventories of DRAM and NAND are at normal levels, about four weeks, and we expect this level to continue decreasing throughout the year.”

Additionally, regarding the highly watched market segment HBM (High Bandwidth Memory), SK Hynix clearly stated that capacity allocation for 2026 has been finalized. All 2026 HBM has been sold out, and production plans to meet customer demand have been allocated.

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, this has given SK Hynix more leverage in negotiations and strengthened its pricing power.

Against this backdrop, SK Hynix revealed that it is “discussing multi-year long-term contracts with major customers.”

The company believes this tense situation “may lead to more favorable terms for HBM business in 2027.”

Furthermore, SK Hynix remains cautious on capital expenditures (Capex).

The company confirmed that this year’s Capex will exceed last year’s but emphasized that it will “continue to adhere to Capex discipline.” The investment priorities are very clear: focusing on HBM and standard DRAM. For NAND business, although some investments have resumed (mainly migrating to 321-layer 3D NAND), its share of total Capex will remain stable (expected to stay in the low double digits percentage), without reckless expansion.

Storage Chip Concept Stocks Surge Across the Board

On February 20, Eastern Time, US stock storage concept stocks surged across the board, with SanDisk up 4.65% and Micron Technology up over 2%. During the Asian trading session, SK Hynix jumped 6.15%, hitting a new all-time high; Samsung Electronics also reached a record closing high. Hong Kong-listed storage chip concept stocks also saw modest gains, with Lianqi Technology surging over 8% at one point and GigaDevice rising nearly 4%.

That day, reports indicated that storage chip giant Samsung Electronics was negotiating prices for its latest generation AI storage chips, with prices up to 30% higher than the previous generation.

Saxo Bank’s Chief Investment Strategist Charu Chanana said that the reports about Samsung HBM4 highlight the industry’s “pricing power,” “which indicates that supply remains tight for AI storage chips, and Samsung believes it has regained some pricing leverage in the high-end market.”

Market research firm TrendForce predicts that in the first quarter of 2026 alone, DRAM and NAND flash prices are expected to increase by 90% to 95% and 55% to 60%, respectively.

Google DeepMind CEO Demis Hassabis recently discussed the global “memory shortage” in an interview. He stated that the entire supply chain of memory chips is constrained, and hardware-level challenges are “limiting a large number of AI deployments.”

Intel CEO Pat Gelsinger also warned that the bottleneck in AI development has shifted from “computing power” to “memory” and broader infrastructure systems. He bluntly said that memory shortages will not ease before 2028.

Bernstein semiconductor analyst Mark Li warned that memory prices are rising in a “parabolic” manner. While this will bring substantial profits to Samsung Electronics, Micron, and SK Hynix, other sectors of the electronics industry will pay a heavy price in the coming months.

Counterpoint Research stated that rising memory costs could make low-end devices economically unsustainable for electronics companies. As profit margins decline, some low-cost smartphones may completely exit the market.

(Source: Securities Times)