MR. Reports

July 9th, 2026

Morning brief · 8:26 AM ET. Afternoon updates post on their own page when the news warrants.

Morning brief 8:26 AM ET

Memory Report — 2026-07-09

SK Hynix priced the year's second-biggest global share sale into a book more than seven times covered, a loud vote of confidence in the memory shortage even as the sector's stocks wobble.

The headline is the Nasdaq debut. Demand for SK Hynix's $28 billion US share sale was more than seven times available shares, underscoring huge investor appetite for one of the most important companies in the AI supply chain; the offering, which will finance new factories and equipment to meet surging AI chip demand, is set to be the world's second-biggest share sale after SpaceX's record-breaking $85.7 billion IPO last month. The offering was so heavily oversubscribed that underwriters shut the books early, closing order-taking at 4 p.m. New York time on July 8. Funds managed by Baillie Gifford, Coatue Management, and Situational Awareness Partners have indicated interest in buying up to $7 billion worth of ADSs. The ADRs price Thursday and begin trading Friday under SKHY. The subtext matters: the listing is expected to help SK Hynix narrow its valuation gap with Micron, which trades at a 12-month forward P/E of 6.66 times versus SK Hynix's 5.5 times. Notably, that appetite held even as SK Hynix shares have dropped by about a quarter in the last two weeks, though the stock is still up 680% in 12 months.

The fundamentals underneath are ferocious. Samsung this week guided to preliminary Q2 2026 operating profit of 89.4 trillion won, roughly $58 billion, up 1,810% year over year, driven by explosive demand for AI memory, with price increases not only in HBM but also in conventional DRAM and NAND flash. That is the highest quarterly operating profit in the company's history, and yet Samsung stock gave up as much as 10% during the Seoul session before settling 6.9% lower at the close. The near-term wrinkle is real but narrow: industry estimates suggest the smartphone business slipped into its first quarterly operating loss as soaring memory prices raised component costs, while the foundry and System LSI businesses reportedly remained in the red. In other words, memory is now cannibalizing Samsung's own downstream margins, a vivid illustration of who holds pricing power.

On pricing, the rally is decelerating but not reversing. TrendForce sees conventional DRAM contract prices rising 13 to 18 percent quarter over quarter in the third quarter, while NAND flash contract prices rise 10 to 15 percent. The firm raised its Q3 PC DRAM forecast from 8 to 13 percent up to 15 to 20 percent, and expects server DRAM to climb 13 to 18 percent, driven by strong server demand and tight supply. The shortage is cascading into legacy nodes, with DDR2 contract prices estimated to rise roughly 55 to 60 percent in 2Q26 and a further 35 to 40 percent in 3Q26.

HBM remains the epicenter. Micron has already shipped over $1 billion in HBM4 revenue, and HBM3E and HBM4 are both fully booked through calendar 2027, with demand extending into 2028. On the demand side, a Meta internal memo surfaced today confirming the land grab: to expand computing infrastructure, Meta has secured long-term, multi-year supply agreements, including deals with Samsung for memory chips, SanDisk for flash storage, and Sumitomo Electric for fiber-optic equipment.

Watch Friday's SKHY open on Nasdaq for the market's real-time verdict on whether the shortage is structural or, as the tape has hinted this week, a trade the crowd is temporarily rotating out of.

Sources

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