The storage supercycle appears to continue, and Samsung’s pullback has not altered fundamentally strong fundamentals

Overview

This weekly report focuses on the global storage industry, centering on Samsung’s stock pullback, the high level of the BofA Memory Indicator, CXMT IPO progress, and Nanya Tech’s earnings rebound. The report argues that recent market concerns about reduced Meta orders, CXMT capacity, and potential post-2Q growth deceleration do not yet constitute a storage-sector downside signal; instead, demand from major U.S. technology companies, DRAM/NAND pricing, HBM demand, and cloud capex still indicate the storage supercycle is continuing.

Core views

The core view is that memory supply-demand remains tight, DRAM and NAND prices are at or near historical highs, and AI servers plus HBM continue to drive high-end memory demand. Although CXMT is growing rapidly, high-end DRAM is still constrained by quality and U.S. restrictions, so its short-term impact on the global high-end market is limited; Nanya Tech is benefiting from legacy DRAM shortages and a sharp ASP rise, with materially improved profitability.

Analysis framework

The report combines the BofA Memory Indicator, WSTS global billings, Korea memory exports, DRAM/NAND spot and contract prices, major memory suppliers’ financials, cloud hyperscaler capex, and HBM product-spec evolution, using a top-down industry forecasting approach alongside bottom-up company comparison.

Methodology notes

• Industry CycleBofA Memory Indicator

  Measures memory-cycle strength based on spot prices, global billings, Korean exports, and related indicators.

  The May reading was 183, well above the mid-cycle 100 and down-cycle 80, and also above the 2017/2024 peaks around 120-130, indicating the current memory cycle remains in a strong zone.

• Forecasting FrameworkTop-down global memory forecast

  Forecasts DRAM/NAND industry revenue using ASP, bit growth, revenue, and demand-structure assumptions.

  The report raised 2026-2028 DRAM and NAND revenue estimates, mainly reflecting higher ASP assumptions, and views both DRAM and NAND revenue as near quadruple-growth in 2026.

• Company ComparisonBottom-up memory company analysis

  Compares quarterly sales, ASP, shipments, and margins across Samsung, SK Hynix, Micron, Nanya, and other peers.

  The report uses company-level data to validate the strong industry cycle and notes that HBM, eSSD, 3D NAND, and legacy DRAM shortages together support high margins.

Asset mapping & comparison

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

• Nanya Technology

  Core beneficiary

  Strengths

  Legacy DRAM shortage, sharply higher ASPs, 2Q OP margin of 74%, and valuation multiples still seen as relatively low in the report.

  Weaknesses

  Business is sensitive to DRAM price cycles; if price increases slow or demand weakens, operating leverage could deteriorate.

  Comparison

  The report argues its legacy DRAM profitability is even stronger than HBM and that 2Q results are broadly consistent with prior bullish forecasts.

  Risks

  DRAM ASP declines, faster-than-expected capacity expansion by China peers such as CXMT, or slower channel restocking by customers.

• Samsung Electronics

  Global storage leader and sentiment barometer

  Strengths

  Benefits from DRAM, NAND, HBM, and high-end memory demand; the report still views fundamentals as robust.

  Weaknesses

  Recent stock movement has been pressured by concerns about reduced Meta orders, CXMT capacity expansion, and post-2Q deceleration worries.

  Comparison

  Like other non-China high-end memory vendors, Samsung is expected to remain an important supplier in high-end DRAM.

  Risks

  HBM customer qualification, price normalization, cloud-order volatility, and intensifying competition.

• CXMT

  Potential supply-disruption variable

  Strengths

  2Q26 sales guidance up about 7x YoY, large scale of potential capacity, and progress in the IPO process.

  Weaknesses

  Global DRAM share remains high single digits, and high-end products are constrained by quality issues and U.S. controls.

  Comparison

  The report sees limited short-term competitive pressure from CXMT on high-end DRAM, HBM, SOCAMM, and GDDR7 segments.

  Risks

  Actual post-IPO capacity ramp and product upgrades may outpace expectations and alter supply assumptions.

• HBM Supply Chain

  Structural growth direction driven by AI demand

  Strengths

  HBM capacity and bandwidth keep rising with AI GPUs/ASICs; 2026E/2027E TAM is expected to reach US$77bn/US$135bn.

  Weaknesses

  High capex requirements and the possibility of price normalization as supply comes online.

  Comparison

  Compared with traditional DRAM, HBM generally has higher unit prices and margins, though the report also notes legacy DRAM can show similarly strong margins under certain shortage conditions.

  Risks

  Slower AI capex, shifts in GPU roadmaps, or supply expansion for HBM outpacing demand.

Key data

• BofA Memory Indicator183May reading, near historical highs; 2017/2024 peaks were around 120-130, with mid-cycle near 100 and down-cycle near 80.
• 3Q DRAM ASP Assumption+21% QoQRaised from the prior assumption of +17% QoQ.
• 2026E DRAM Revenue Forecast+325% YoYDriven mainly by a nearly 3x ASP rebound, with DRAM ASP expected to rise +249% YoY.
• 2026E NAND Revenue Forecast+299% YoYDriven mainly by a roughly 2.3x expansion in ASP, with NAND ASP expected to rise +238% YoY.
• 2026E/2027E HBM TAMUS$77bn / US$135bnThe report maintains a bullish view on HBM, arguing that volume growth and cost declines in 2027 could offset pricing declines.
• Nanya Tech 2Q PerformanceSales +684% YoY, OP margin 74%The main drivers were DRAM ASP up 60%+ QoQ and 500%+ YoY.
• Nanya Tech Target PriceNT$660Based on 9x 2027-2028E P/E, Buy is maintained.
• CXMT 2Q26 Sales GuidanceCNY59-69bn, approx. US$9.5bnApproximately 7x YoY growth, but global DRAM share remains high single digits.

Impact & implications

If the report’s thesis holds, memory-chain earnings upward revisions may continue, especially for companies benefiting from HBM, server DRAM, legacy DRAM, and enterprise SSD demand. For investors, Samsung’s short-term pullback appears to reflect sentiment and order concerns more than a storage-cycle turn; Nanya Tech shows high operating leverage under legacy DRAM shortages.

Risks

• If large-tech customers such as Meta reduce orders more than expected, expectations for AI-related storage demand could weaken.
• If CXMT or other Chinese memory peers ramp capacity and upgrade products faster than expected, supply competition may intensify.
• DRAM/NAND spot prices are already at high levels, and the report also notes DRAM may have 10%+ downside potential by the end of 2026.
• NAND prices weakened in June–July, and further corrections through summer could affect sector sentiment.
• If cloud capital expenditure falls short of expectations, HBM and server-storage demand could be pressured.

What to watch

• CXMT IPO application on July 16 and subsequent listing progress.
• Whether 3Q DRAM quarterly contract prices can realize gains above 20%.
• Subsequent Korea memory exports, WSTS billings, and BofA Memory Indicator readings.
• Whether DRAM spot prices can stay strong after the rebound in June–July and whether NAND prices continue to correct.
• 2026-2028 capex guidance from cloud players such as Amazon, Microsoft, Alphabet, Meta, and Oracle.
• Nanya Tech 3Q guidance and the persistence of legacy DRAM shortages.