On Monday, the global memory chip sector experienced a severe blow from market sentiment. Influenced by expectations for overseas liquidity tightening and the first drop in DRAM spot prices in months, shares of South Korean memory giants plummeted, while the A-share memory segment also showed weakness under emotional pressure. Market anxiety primarily stemmed from panic over the notion that "falling spot prices signal a cycle peak."

However, in a research report released on February 2nd, Goldman Sachs strongly countered this pessimistic outlook. The report indicated that despite volatility in the spot market, DRAM contract prices have not fallen but instead face an even more aggressive upward revision. Goldman Sachs significantly raised its forecast for DRAM price increases in the first quarter of 2026, projecting a quarter-on-quarter surge of 90-95%, far exceeding previous market expectations and the bank's own prior estimates. Against this backdrop, the current market decline is viewed as a misreading of fundamentals. A substantial price gap exists between spot and futures (contract) prices; the high-priced spot market currently exhibits a state of "nominal prices without actual transactions," whereas the contract market, which truly determines corporate profits, remains in a strong upward trend. Goldman Sachs reiterated its "Buy" ratings on Samsung (SEC) and SK Hynix, suggesting that negative news is disrupting tech stock performance, representing a market "misstep" regarding memory chips. DRAM Contract Price Surge Forecast: Q1 Could Soar 95% Analyst Giuni Lee's team at Goldman Sachs pointed out in the report that pricing forecasts for DRAM in major application areas for Q1 2026 have been substantially revised upwards. Specifically, overall pricing for traditional DRAM is expected to achieve a further quarter-on-quarter increase of 90-95% in Q1 2026, building on an anticipated 45-50% quarter-on-quarter rise in Q4 2025. This forecast is significantly higher than Goldman's previous expectation of a 77-82% quarterly increase for Samsung and SK Hynix, and also surpasses the Wall Street consensus. For mobile NAND (eMMC/UFS), contract prices in Q1 2026 are also projected to rise 55-65% quarter-on-quarter, aligning broadly with Goldman's prior forecast of a 45-70% increase for overall NAND pricing. Although consumer electronics demand has weakened during the off-season, robust enterprise SSD (eSSD) and AI-related storage demand has led to limited supply allocations for smartphone and PC clients, continuing to drive up prices in these segments. PC & Server DRAM: Supply Shortages Drive Premiums Higher Within specific segments, the momentum for price increases in PC DRAM and server DRAM is particularly strong. TrendForce has revised its Q1 2026 PC DRAM contract price forecast up to a quarter-on-quarter increase of 105-110%, while maintaining its Q2 forecast of a 20-25% quarterly rise. This figure is substantially higher than Goldman's previous estimate of 80-90%, suggesting further potential upside in the market. Specifically, in January, the price for DDR4 8GB modules increased 83% month-on-month to $85, while DDR5 8GB module prices rose 90% to $75. With some price negotiations concluding only in January and supplier inventories remaining tight, prices could potentially climb further during the remainder of the quarter. The server segment also faces a situation of demand outstripping supply. Although suppliers have shifted some capacity from PCs and smartphones to servers, supply remains constrained due to strong demand from North American and Chinese cloud service providers (CSPs), keeping supplier pricing power firm. TrendForce raised its Q1 2026 server DRAM contract price forecast to a quarter-on-quarter increase of 88-93%, slightly above Goldman's prior expectation of 75-80%. Notably, the premium for DDR5 over DDR4 is narrowing, with the premium for a DDR5 64GB module compared to an equivalent DDR4 module decreasing to 9% in January. Mobile DRAM: AI Demand Squeezes Capacity The mobile DRAM market is not immune. TrendForce has sharply increased its Q1 2026 price forecast for LPDDR5X from a previous quarter-on-quarter increase of 45-50% to 88-93%. The logic behind this aggressive price hike expectation is capacity squeeze: robust demand for memory chips from server customers is widening the supply-demand gap in other application areas. As suppliers prioritize fulfilling more profitable server and AI-related demand, supply for mobile DRAM has become increasingly tight, forcing prices significantly higher. This latest forecast is also markedly higher than Goldman's previous expectation of a 75-80% quarterly increase for Samsung and Hynix in this segment. Valuation & Price Targets: Reiterated Buy Ratings Based on the strong price increase expectations, Goldman Sachs reaffirmed its positive stance on the two South Korean memory giants. For Samsung, applying a valuation model based on 2026 expected EV/EBITDA, Goldman set a target price of 205,000 Korean Won for common stock, with key downside risks including a deterioration in memory supply-demand and contraction in smartphone margins. For SK Hynix, Goldman Sachs set a 12-month target price of 1,200,000 Korean Won. Analysts noted that given Hynix's significant growth in HBM (High Bandwidth Memory) revenue, it deserves a 30% "AI premium" relative to Samsung. This target price is calculated based on a target Price-to-Book (P/B) ratio of 2.8x, referencing the valuation peak during the last strong pricing up-cycle (2009-2010). In summary, although short-term price fluctuations in the spot market have sparked investor panic, data from Goldman Sachs and TrendForce indicate that the contract price cycle for the memory chip industry is in the midst of its most vigorous upswing in recent years. Market concerns about a "cycle peak" may represent a misstep caused by information asymmetry.