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Morning brief 7:59 AM ET

Memory Report — 2026-07-03

South Korea's chip trade staged one of its sharpest reversals of the year, with Samsung Electronics and SK Hynix stocks rebounding on Friday, as bargain hunters returned after Thursday's bruising sell-off, Samsung trading up 6.82% and SK Hynix up 4.6%. The context matters more than the candle: Thursday's KOSPI plunged 7.89%, led by Samsung down 8.90% and SK Hynix down 12.81%, after Meta's plan to sell computing power raised questions over excess AI capacity. As @jukan05 and @BullTheoryio flagged in real time, that Meta-linked "capacity peak" fear looks overplayed against the underlying supply math. Citi's Peter Lee called Samsung's pullback a technical correction, noting memory fundamentals are intact and server DRAM pricing has been outperforming on strong CPU demand, and he raised his 2026 operating profit forecast for Samsung to 401 trillion won from 334 trillion won. The real test comes Monday, July 7, when Samsung posts preliminary Q2 numbers.

On pricing, the structural story is intact even as the pace cools. TrendForce's latest quarterly read has 3Q26 memory contract prices continuing to rise on AI server demand, though high baselines, consumer cost limits, and LTA constraints will noticeably narrow the price hikes across segments. That deceleration follows an extraordinary run: conventional DRAM contract prices rose roughly 90-95% in 1Q26 and 58-63% in 2Q26 on TrendForce's numbers, so a step down to double digits is normalization, not reversal. The shortage is now cascading into legacy nodes, with DDR2 contract prices set to rise 35-40% in 3Q26 as the three major suppliers prioritize advanced-node capacity for HBM and server DRAM, forcing consumer buyers into older generations.

The bigger structural signal came from SK Hynix's contract strategy. As @wallstengine noted, TrendForce reports that SK Hynix is now adopting contracts that eliminate the industry-standard price cap, allowing spot market price increases to be fully reflected in contract pricing when shortages push market prices higher. That diverges sharply from Micron, whose new GM Strategic Customer Agreement carries binding volume commitments, an upper price cap tied to April-June market levels, and a contractual price floor over the full term. The context: SK Hynix and Samsung are extending long-term supply contracts from the existing one-year level to three to five years. A supplier confident enough to strip out its own price ceiling is telling you where it thinks prices are going.

Capex confirmed the multi-year bet. At Thursday's Korean industry briefing, SK Hynix unveiled a KRW 100 trillion Cheongju investment, including KRW 80 trillion for a new M17 NAND fab targeting first-half 2029 operations, while Samsung announced KRW 140 trillion. And Goldman leaned harder into HBM: per multiple reports, the bank significantly raised its 2027 HBM price growth forecast for Samsung from the previous 14% to 44%, and suggested this may not be the ceiling, citing DDR5 spot prices at a 25% premium to May contract prices and DDR4 spot at a 45% premium. Spot running that far ahead of contract is the market bidding for chips it cannot get.

Watch Samsung's July 7 preliminary Q2 print. If server DRAM pricing and HBM commentary hold, this week's wobble reads as sentiment noise inside a supply crunch that no one is scheduled to relieve before late 2027.

July 3rd, 2026

Memory Report — 2026-07-03

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