Herman Jin
Formerly in Asia FICC at Goldman Sachs, Macro & Semiconductor Investing
SK hynix and other Korean memory makers' aggressive price hikes invite customers to optimize memory use, undermining the case for 90% margins despite a long-term shortage. Memory is the only layer raising cost per token. Elon Musk described Micron's future pricing as reasonable and other suppliers' as extortionate, warning that today's customers would not forget; exorbitant long-term contracts compound that risk. x.com x.com
NAND looks better than DRAM, favoring SanDisk over Micron and SK hynix. The NAND cycle is clearer and longer. DRAM price hikes are the only driver of token inflation, propped up by OpenAI and Anthropic paying about $50 per watt; as models commoditize, pricing power shifts to cloud providers and disorderly DRAM hikes become a target. Multi-model tiering can also use GPUs to relieve some DRAM demand. Shortages don't change this: no semiconductor can raise prices without limit. x.com x.com
Samsung Electronics and SK hynix face a buyer backlash over memory pricing in a cyclical business. Elon Musk called Micron reasonable about future prices and other suppliers extortionate, warning customers would remember; the remarks seem aimed at Samsung and SK hynix. Micron appears to be focusing on long-term contracts. x.com x.com x.com
Memory makers' long-term agreements cannot protect pricing when buyers regain leverage. The market underestimates downside even before a price collapse; SK hynix's agreements price within market-linked ranges, per @jukan05. The agreements will be ripped apart when the market turns to buyers, at the latest when China ramps. SK hynix, Samsung, Micron, SanDisk and Kioxia are exposed. x.com
Micron, Samsung Electronics and SK hynix look very cheap if their long-term agreements do not impose overly conservative price ceilings. Greater clarity on those pricing terms could send memory stocks up 30% in a single day. x.com
Elon Musk's view that Micron's reasonable future memory pricing can build long-term customer loyalty supports going long. Musk says other suppliers have been extortionate, a contrast customers will not forget. x.com
Tight memory-chip supply through 2030 is good for Micron. SK hynix expects the shortage to last that long and reports a 632% profit jump. x.com
Micron and SK hynix pricing in a memory shortage past 2030 extends the memory-cycle case beyond the Street's 2028 expectation. SK hynix's record quarter adds evidence: per Wall St Engine, revenue rose 328% to $78.9B, operating profit rose 632% to $62.8B, and operating margin hit 80%. Agentic and physical AI could add demand as they roll out. x.com x.com
Inflation, rising rates, Chinese competition and rising AI-related financial costs are pressuring the memory market. Micron, Samsung and SK hynix look exposed; waiting for the cycle to turn. x.com x.com
Rising memory contract prices strengthen the case for memory stocks still far below their highs. JPMorgan forecasts Q4 DRAM prices up 13% and NAND up 18%; Micron is 28% below its 52-week high, Seagate 44%, Sandisk 47% and Western Digital 55%. x.com
Tight memory supply keeps the AI memory supplier trade in bill-of-materials names if it persists. The investor aleabitoreddit reports an SK hynix shortage outlook through 2030 and an operating-margin result near 80%. HBM allocation and average-selling-price guidance are the next tests; Korea has already priced the earnings print, so the next move depends on who locks capacity. x.com
Samsung Electronics' HBM4 pricing looks set to lead the memory Big Three, helping make next year's earnings phenomenal. Samsung memory EVP Jaejune Kim said next year's HBM supply is sold out at target prices, with more customer requests coming. Korean media had reported quotes in the mid-to-high $4/Gb range; Nvidia appears to have accepted Samsung's asking price. Samsung-equipped Rubin variants should sell as separate premium-priced SKUs against SK hynix or Micron versions. x.com
