Jeff Pu
Technology Equity Analyst at GF Securities
SK hynix's stronger pricing and contracted demand support the still-favored memory duration trade. DRAM and HBM capacity is sold out through 2029, and a supply-demand imbalance is expected through 2030. More than half of 2027-28 capacity is under long-term agreements, with agreed 2027 HBM prices significantly higher year on year. Guangfa HK expects fund flows and bearish sentiment to improve after earnings. x.com
NAND has joined DRAM and HBM as a bullish memory call, with AI data-center SSD demand driving a pricing breakout for Micron, SK hynix, Samsung, SanDisk and Phison. Per TrendForce, NAND demand is tracking much stronger than expected as US hyperscaler eSSD demand nearly doubled versus projections. NAND price forecasts rise to +21%, +17% and +15% quarter on quarter for 3Q26-1Q27, versus +18%, +2% and 0% before, while supply stays disciplined and hyperscaler inventory falls further. x.com x.com x.com x.com x.com
Memory remains structurally scarce because SK hynix says conventional DRAM and HBM are practically sold out through 2029, while customers request roughly twice the HBM volume it can produce. Long-term agreements cover more than half of 2027 and 2028 capacity, and the company expects the supply-demand imbalance to persist through 2030. x.com x.com
SK hynix's enforceable long-term supply commitments add visibility to memory profits. It says DRAM and HBM volumes through 2029 are effectively sold out, with agreements covering over half of 2027-28 capacity while retaining pricing flexibility. Operating profit beat expectations at $62.8B versus about $58B, and SK hynix announced $75B in 2026 shareholder returns. It expects the memory shortage to persist through 2030. 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
SK hynix's contracted volumes make revenue more dependable than margins. LTAs cover over half of 2027-28 capacity, but not all demand through 2029 is signed, and prices still move within agreed ranges. Big customers' 2027 HBM volume and pricing are settled; HBM4 yields are ahead of plan. Server DDR5 shipments rose over 40% quarter on quarter, though most of the earnings beat came from pricing. Management expects the HBM profit premium over regular DRAM to narrow next year. x.com
SK hynix's strong pricing and secured capacity could push memory stocks higher. Per Wall St Engine, its Q3 DRAM ASP rose by a high-20s percentage quarter over quarter, while long-term agreements cover more than half of its 2027-28 capacity. Those figures support the memory upcycle. x.com
Memory prices look to be at their peak for SK hynix and Micron as Chinese commoditization catches up. CXMT has made HBM3E and is now only one generation from HBM4, so China will scale its own DRAM and HBM production. Over several years, supply and innovation have always caught up with demand in past cycles, and US work on memory architectures that work around HBM or use less of it is already well underway. That contradicts @jukan05's reading that CXMT's progress tightens commodity DRAM. x.com … Show more
SK hynix's five-year agreements with 14 major customers cover more than half its 2027-28 capacity, giving its memory earnings unusually long visibility. DRAM prices rose 28% and NAND 25% in the quarter, while operating profit reached 62.8 billion against 58.5 billion expected; Q4 DRAM shipments are guided up 25% from Q3. Those commitments support the view that demand is not peaking yet. Overweight, $400 target. x.com
Prepaid contracts and demand-paced fabs weaken a broad 2028 memory-glut case. SK hynix says over half its 2027-28 capacity is signed with deposits; 'sold out through 2029' includes negotiations. Samsung targets 60-70% contracted capacity. Micron's three projects begin output in 2H28; tooling follows demand. Reuters says CXMT's 20-30%-yield HBM3E may ship this year to export-restricted Chinese buyers, but performs like older HBM3. Commodity DRAM risks 2028-29 oversupply; NAND could ease in 2H27. … Show more
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
More memory CapEx may yield proportionally fewer bits as HBM consumes more wafer capacity, supporting SK hynix and Samsung's pricing. Both reported double-digit quarterly DRAM and NAND price gains; Samsung targets 60-70% of mid- to long-term capacity under LTAs. SK hynix has the stronger execution record, but Samsung could benefit enormously from conventional memory without winning HBM4. If trends persist, normalized margins could rise, though memory remains cyclical. x.com
