Finn Stockinger
Equity Analyst & Investor, Technology Research
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
Memory makers retain pricing power as demand grows faster than capacity can be added. SK hynix says 14 major customers have secured over half its 2027-28 capacity, with contracts that retain some upside if market prices rise; it expects shortages through 2030, though forecasts that far out are uncertain. Customers are locking in output before capacity exists. This may make the cycle different from earlier ones, not eliminate cyclicality. 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
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
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 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
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
Samsung's record quarter looks closer to a peak than a new base: conventional DRAM shipments are flat year on year, while higher prices per bit drove profits despite a revenue miss. Its phone unit is cutting output because memory costs too much, and AI chip designers are seeking to use less HBM. Buyers' response threatens the price-led margin surge. The October 29 divisional earnings breakdown may show whether memory profit grew much faster than group profit. x.com
SK hynix stands to benefit from higher HBM prices as supply remains constrained. Needham expects HBM price increases next year and tight memory supply through 2030; SK hynix has finalized 2027 HBM prices and volumes with major customers. SK hynix also plans roughly KRW100 trillion in FY2026 shareholder returns, including at least KRW30 trillion in dividends and KRW60 trillion in share acquisitions and cancellations. x.com x.com
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
Nvidia's proposed common NVHBM base die would make Micron, SK hynix and Samsung more interchangeable, weakening their pricing power. Seoul Economic Daily reports Nvidia wants all three to fabricate it at TSMC; Samsung reportedly agreed. Standardization would ease validation and order shifts. The risk lessens if SK hynix or Micron retain their own logic or NVHBM stays a small share of Nvidia's purchases. 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
