JPMorgan Chase's latest research report highlights that the combined market capitalization of leading memory chip manufacturers is nearing $1 trillion. Based on historical valuation trends, this figure is projected to surge to $1.5 trillion by 2027, indicating over 50% upside potential for top players.

On December 14, JPMorgan stated in its report that the current cycle will be the longest and strongest memory upcycle in history. While investors widely worry about potential DRAM oversupply in 2027 due to new capacity, JPMorgan's data model suggests these concerns are unfounded. The crowding effect of HBM production and structural demand from AI inference (which consumes three times more memory than training) will keep DRAM bit supply growth trailing demand growth for the next two years.

The market is experiencing a "dual-track" pricing system. Strong B2B (enterprise/AI) demand supports high prices, while B2C (consumer) faces cyclical pressure. However, rising server demand will fully offset downside risks from the consumer segment.

Valuation Reset: March Toward $1.5 Trillion JPMorgan addresses investor concerns: After memory stocks' three-month rally approaching the $1 trillion market cap milestone, what's next? The answer is clear: Stay long.

Using a "market cap/total addressable market (TAM)" framework, JPMorgan forecasts the memory market will reach $420 billion by 2027. Applying the median price-to-sales (P/S) ratio of 3.5x from the 2018 and 2021 cycles, leading memory manufacturers' combined market cap could approach $1.5 trillion by 2027, implying over 50% upside from current levels.

Supply-Demand Reality: Shortages Through 2027 The primary bear argument—that new fabs and accelerated tech migration will cause DRAM oversupply in 2027—is refuted by JPMorgan's bottom-up "capacity-bit" analysis model:

1. Persistent Gap: Though the supply-demand gap may narrow from 5% in 2026 to 3% in 2027, the market will remain undersupplied. 2. Capacity Crowding: Strong CSP (cloud service provider) demand forces manufacturers to allocate more capacity to HBM, which will grow from 19% of total DRAM capacity in 2025 to 28% in 2027. 3. Constrained Supply: Conventional DRAM capacity is expected to decline year-over-year in 2026. Even with new capacity from Samsung's P4 and SK Hynix's M15X in 2027, cleanroom space limitations and increased process steps will cap DRAM bit shipment growth below 20%.

Pricing Power Dichotomy: B2B Boom vs. B2C Cycle This is a "memory hunger game." Aggressive resource competition between CSPs and select consumer electronics brands has driven recent sharp price increases. JPMorgan predicts clear price divergence from late 2026 through early 2027:

- B2B (AI-driven): Prices will remain firm, supported by AI inference demand. - B2C (consumer): Faces cyclical price pressure due to customer resistance to high prices.

Key Projections: - FY26E: DRAM ASP to surge 53%, NAND ASP up ~30%. - FY27E: DRAM ASP may edge up 1%, while NAND ASP could dip 6%.

AI Drivers: HBM and eSSD Structural Opportunities HBM (High Bandwidth Memory): The GPU vs. ASIC debate triggered by Google Gemini 3.0 actually benefits HBM demand. - Specification upgrades: Google's next-gen 2nm TPU may adopt HBM4, while Rubin Pro GPU's 4x capacity growth will strain supply. - Sustained shortage: JPMorgan expects 8%-12% HBM supply gaps through 2027, potentially extending to 2028.

SSD: AI inference's rise is expanding enterprise SSD (eSSD) markets, with AI servers using triple the SSD capacity of conventional servers. With HDD makers showing cautious 2026 capex guidance, JPMorgan forecasts eSSD will enjoy strong demand tailwinds, driving 27% NAND price growth in FY26.

Capital Expenditure: Growth With Discipline Despite announced capacity expansions, JPMorgan believes actual bit supply growth will be offset by physical migration challenges. - Equipment spending leads: DRAM wafer fab equipment (WFE) growth will significantly outpace total capex growth (19%/26% in 2026/2027). - Controlled intensity: Both DRAM (<30%) and NAND (<20%) implied capital intensity will remain below five-year averages, showing continued supply-side discipline.