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Morning brief 10:11 AM ET

Memory Report — 2026-07-04

Korea's memory duo staged one of the wildest reversals of the cycle on Friday, with the Kospi snapping back 5.8% to reclaim 8,000 as the fundamental supply story reasserted itself over a two-day AI-demand scare.

The Kospi gained 440.25 points, or 5.76 percent, to close at 8,088.34 after rising as high as 8,211.54, a rebound that came after the index plunged 7.89 percent on Thursday, dragged down by a sharp sell-off in Samsung Electronics and SK hynix. Samsung Electronics closed at 309,500 won, up 8.22 percent, while SK hynix closed at 2,425,000 won, climbing 10.88 percent. That Thursday plunge was severe: it marked SK Hynix's biggest daily plunge since 2008 and Samsung dropped 9% on concerns about possible industry overcapacity. The trigger was a demand wobble, not a supply one. The selloff followed reports that Meta Platforms is building a cloud business to sell off its excess AI computing power rather than keep expanding its own data centers, and investors took that as a signal that demand for the memory chips powering AI servers might not keep growing as fast as expected. Sentiment turned after a report that Anthropic is in talks with Samsung to co-develop a custom AI chip.

Strip away the tape and the pricing picture is the strongest in the industry's history. TrendForce expects server DRAM contract prices to rise 13% to 18% quarter-over-quarter in the third quarter of 2026, primarily driven by strong server demand and overall tight supply, while it raised its Q3 PC DRAM forecast from 8% to 13% up to 15% to 20%, and Q4 from 0% to 5% up to 3% to 8%. This follows a first quarter in which conventional DRAM contract prices increased roughly 93% to 98% QoQ, contributing to an overall industry revenue increase of 81% QoQ to $97 billion. UBS is even more aggressive on the near-term path, now forecasting NAND prices to rise 30% quarter-on-quarter in Q3 2026, compared with its previous forecast of 17%, while maintaining its Q4 2026 projection of a 12% increase.

The structural leg is the supply deficit, which keeps getting pushed further out. UBS now expects the DRAM industry to remain undersupplied until at least the second quarter of calendar 2028, compared to its prior forecast of the fourth quarter of 2027, and expects NAND undersupply to last until the fourth quarter of 2027. The math behind it is stark: UBS forecasts DRAM bit demand growth of 36.2% year-on-year in 2027 while supply grows just 19.3%, a gap that would leave the market with an unprecedented supply deficit. Crucially, the cycle is being de-risked by contracts, with UBS estimating up to 30% of DDR volumes industry-wide now locked in at pricing slightly below current levels through multiyear agreements. On the AI leg, UBS raised its assumed HBM year-over-year price increase to 50%, up from 35%, projecting HBM shipments of 7.78 billion gigabits in 2026 growing to 12.05 billion gigabits in 2027.

The near-term catalyst arrives Tuesday: Samsung is expected to report preliminary operating profit of 85 trillion won, or $55.3 billion, for the June quarter, an 18-fold increase from a year earlier. Also worth watching is SK Hynix's Nasdaq ADR debut on July 10, and whether the Meta cloud narrative resurfaces to test a market where the fundamentals, for now, keep printing records.

July 4th, 2026

Memory Report — 2026-07-04

Sources