The short-term pullback in memory stocks is viewed as overblown, with AI demand and the price cycle still relatively strong

Overview

This is a global memory-tech weekly report updating views on Meta memory chip orders, the likelihood of CXMT entering Apple's supply chain, Korea's new memory cluster, Japan research feedback, Samsung Electronics' preliminary 2Q operating profit, and DRAM/NAND pricing trends. The core conclusion is that AI data-center demand, hyperscaler capex, and storage pricing remain strong, while near-term market worries over supply-demand inflection and competitive risk are excessive.

Core views

The report sees the global memory industry still in an AI-demand-driven up-cycle. Meta's long-term demand for advanced memory such as HBM, LPDDR5, and eSSD remains stronger; CXMT may be used by Apple for bargaining, but actual procurement is expected to be limited; the Korean W800tn new cluster is not likely to add significant capacity in the short term; and Japanese NAND supply-chain feedback indicates ASP trends and 2027 supply-demand outlooks remain relatively tight. Samsung Electronics' overall preliminary 2Q operating profit may be below optimistic expectations because of bonuses and smartphone margin pressure, but the memory business itself is expected to benefit from ASP improvement.

Analysis framework

The report cross-validates industry-chain interviews, Japan investor and supply-chain research, Korean semiconductor export data, TrendForce ASP forecasts, capital spending and cloud margin trends of the U.S. hyperscalers, DRAM/NAND spot and contract pricing, and valuation and price performance of memory stocks.

Methodology notes

• Industry cycle analysisSupply-demand and price-cycle framework

  Assess the cycle position by using ASP, spot price, contract price, inventory replenishment, capacity discipline, and timing of incremental capacity additions.

  The report does not view a single stock sell-off as a cycle peak, but uses DRAM/NAND pricing, AI demand, supply constraints, and the timing of future capacity rollouts to judge that the cycle still has support.

• Industry chain researchSupply-chain interviews and investor feedback

  Validate market concerns and management guidance through exchanges with chipmakers, NAND supply-chain firms, and Japanese investors.

  In the Japan research, investors focused more on downside risk, while management feedback on 2Q-4Q ASP, 2027 shortage, and capex discipline was more constructive.

• Capex trackingHyperscaler capex demand framework

  Use the capex, cloud revenue growth, and margins of Amazon, Microsoft, Alphabet, and Meta to assess whether AI infrastructure demand for memory will persist.

  The report believes 2026 capex by the four major U.S. tech companies is about up 80% year-on-year to roughly US$0.7tn, with 2027-2028 annual capex near US$1tn, supporting sustained memory demand.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• META PLATFORMS INC / US.META

  Demand-side participant for AI data centers and advanced memory

  Strengths

  Meta's long-term chip and component orders are described by some AI supply-chain firms as stronger, and its data-center demand can support cloud service capability expansion.

  Weaknesses

  The market worries Meta may be overinvesting in AI servers or cloud infrastructure and may cut memory chip orders.

  Comparison

  The report believes these concerns lack foundation; Meta remains in a high capex cycle similar to Amazon, Microsoft, and Alphabet.

  Risks

  If AI infrastructure utilization or cloud demand comes in below expectations, capex and memory orders could be revised down.

• Samsung Electronics / 005930.KS

  Global memory chip supplier

  Strengths

  The memory business benefits from DRAM and NAND ASP improvement, and memory-only OP may exceed consensus.

  Weaknesses

  Preliminary company-wide 2Q operating profit may be slightly below optimistic consensus due to bonus pressure and smartphone margin compression.

  Comparison

  Relative to total company profit, the memory segment remains fundamentally stronger; strong Korean exports and price rebound provide support.

  Risks

  Smartphone margin, bonus expenses, price declines, or intensifying competition may squeeze profits.

• CXMT

  Chinese DRAM potential supplier and Apple pricing lever

  Strengths

  May be used by Apple as bargaining power in contract negotiations against Korean and U.S. top three DRAM vendors in H2 2026 or 2027.

  Weaknesses

  Actual probability and scale of entering high-end iPhone supply chain are limited due to U.S. restrictions, Apple's strict specification demands, and DRAM intellectual-property litigation risk.

  Comparison

  Compared with major Korean and U.S. DRAM vendors, CXMT remains weaker on quality, IP, and geopolitical constraints.

  Risks

  If CXMT's technology progresses faster than expected or policy conditions change, it could place margin pressure on low-end iPhone segments or some DRAM pricing.

• Global memory stocks

  Equity exposure across DRAM, NAND, HBM, SSD, and HDD-related assets

  Strengths

  Supported by AI-driven demand, high prices, expected 2027 shortages, and capex discipline.

  Weaknesses

  After the 1H26 run-up, valuations and stock prices are more sensitive to negative news.

  Comparison

  The report says that after the sharp July 2 decline in memory shares, P/E multiples remain relatively low and fundamentals are still strong.

  Risks

  Cycle-peak concerns, policy-driven capacity expansions, customer order reductions, NAND spot prices flattening, or contract price declines.

Key data

• Korean semiconductor exportsUS$44.8bn in June 2026, +21% m/m, more than three times the 2025 monthly average of US$14bnUsed to support strong Korean memory momentum and price improvement.
• Korean semiconductor export year-over-yearJune 2026 +199%, with triple-digit growth for six consecutive monthsIndicates very strong export momentum.
• TrendForce 3Q26 DRAM ASP forecast+13% to +18% QoQ, versus prior forecast of +3% to +8% QoQThe forecast was revised up significantly.
• BofA DRAM ASP assumption2Q26/3Q26/4Q26 are +53%/+17%/+7% QoQ, respectively3Q and 4Q are broadly in line with TrendForce; 2Q is more conservative than TrendForce.
• BofA NAND ASP assumption2Q26/3Q26/4Q26 are +65%/+13%/+1% QoQ, respectivelyConservative relative to TrendForce or broadly in line.
• Four major U.S. tech capexEstimated at about US$0.7tn in 2026, about +80% YoY; US$1tn per year in 2027-2028Amazon, Microsoft, Alphabet, and Meta capex remain rising.
• Hyperscaler cloud revenue growthAbout 35%-40% YoY in 2026-2028Cloud demand remains resilient.
• 16Gb DDR5 spot priceAround US$47 in early July 2026, near cycle highsSupported by AI-related demand and supply constraints from prioritizing HBM production.
• 16Gb DDR4 priceContract price is close to DDR5, around US$35-US$40; spot reached near US$75DDR4 shortages have eliminated DDR5 pricing premium.
• 512Gb NAND contract priceAbout US$25, roughly 10x the 2025-02 trough of US$2.5Substantially higher after 4Q25/1Q26 and then broadly stable.
• 64GB DDR5/DDR4 server modulesDDR5 around US$1,400, DDR4 around US$1,100Server DRAM module prices have reached historical highs.
• New Korean memory clusterPlanned spend is W800tn; the report expects no meaningful output before 2033Limited short-term supply shock.

Impact & implications

The report's implication for the storage value chain is constructive: if AI capex continues to expand, HBM continues to crowd out traditional DRAM production capacity, and NAND supply discipline is maintained, DRAM and NAND prices may remain elevated, allowing memory vendors to keep profit upside. The recent pullback in storage stocks appears more like a sentiment reaction to concerns on Meta, CXMT, and Korea’s capacity plans, rather than confirmation of weaker fundamentals.

Risks

• Meta or other hyperscalers actually cutting AI capex or memory orders.
• If CXMT makes faster progress on quality, IP, or policy constraints than expected, it could intensify DRAM competition.
• Korea's new memory cluster or other new capacity coming online earlier than expected could shift long-term supply-demand balance.
• DRAM and NAND spot prices are already at historical highs; if demand weakens, downside in prices may be sharp.
• Samsung Electronics' total profit may be dragged by bonus expenses, smartphone margin compression, and non-memory businesses.
• If NAND spot prices flatten or soften further in the near term and spread to contract pricing, profitability expectations could weaken.

What to watch

• Samsung Electronics' preliminary 2Q operating profit on July 7, 2026.
• AI capex guidance and cloud revenue growth from Meta and the other three major U.S. hyperscalers.
• Whether Apple actually adopts CXMT DRAM and at what purchase scale.
• Subsequent revisions to TrendForce DRAM and NAND ASP forecasts.
• Whether Korean semiconductor export monthly data continues to show high growth.
• Price movements in 16Gb DDR5, 16Gb DDR4, 512Gb NAND wafer, and server DRAM contract pricing.
• Subsequent feedback from the Japanese NAND supply chain on 2027 shortages, LTA, and capex discipline.