"This is the most aggressive price increase I've witnessed in my career in the memory industry," remarked a senior executive from the sector. Since October, driven by AI demand, major players like Samsung, SK Hynix, Micron, and NAND flash manufacturers have repeatedly raised prices, marking the beginning of a "super cycle" for the memory industry. During this period, Samsung Electronics even temporarily halted DDR5 DRAM contract quotes, triggering supply chain concerns.

UBS predicts that in Q4 this year, DDR (Double Data Rate) contract prices will rise 35% quarter-on-quarter, while NAND flash prices will increase by 20%, far exceeding previous expectations. Moreover, DDR contract prices are expected to surge another 30% in Q1 2026, with NAND prices climbing 20%.

The impact quickly spread to the A-share market. Wind data shows that since the second half of this year, shares of Shannon Semiconductor, East Memory, Longsys, and Biwin Storage have surged by 294.51%, 291.19%, 195.51%, and 67.17%, respectively.

"Memory is a highly cyclical industry, typically spanning three years, but AI demand has extended this cycle by at least a year. The consensus now is that the uptrend will last until at least late 2026. A key factor is that global memory leaders, after enduring a prolonged downturn, slashed prices to historic lows. Now, despite the rebound, they are not expanding production, fueling panic buying and further driving up prices," said Li Sen (pseudonym), an executive at a Shenzhen-listed memory company.

**Super Cycle Begins** As the "memory center" of electronic devices, memory chips represent one of the largest segments in the semiconductor industry. Since 2016, the memory industry has undergone three cycles, each lasting 3–4 years. The current cycle began in 2024, fueled by surging demand for AI servers, which require next-gen memory chips like DDR5 and HBM (High Bandwidth Memory) to unlock computing power.

"We only felt the industry recovery in Q4 2023, but the rapid price surge came in H2 2025. This rally stems from both a rebound from the previous downturn and AI-driven demand exceeding expectations," Li noted.

Notably, HBM production for AI has squeezed capacity for general-purpose memory products like DDR5, LPDDR5x, and GDDR7, accelerating the strongest price hike cycle in history.

"The transition from DDR4 to DDR5 was expected to take two to three years, but ChatGPT disrupted the timeline. With AI investments being highly profitable, manufacturers shifted focus to HBM, leaving DDR5 under-supplied and DDR4 nearly phased out. Yet, China still has strong DDR4 demand, forcing buyers to shift to DDR5, worsening the supply imbalance," Li explained.

Morgan Stanley predicts that AI-driven supply-demand imbalances will sustain a multi-year "super cycle," pushing global memory market size toward $300 billion by 2027.

**Big Three Reap Benefits** Micron recently reported stellar Q1 FY2026 earnings (ending Nov. 27, 2025), with adjusted revenue up 57% YoY to $13.64 billion, beating estimates of $12.95 billion. Adjusted net profit surged 58% to $5.482 billion, sending shares up over 7% post-market. Its Q2 revenue guidance of $18.7 billion (±$400 million) also far exceeded expectations of $14.3 billion.

Samsung Electronics posted Q3 2025 operating profit of ₩12.16 trillion ($8.56 billion), up 32.2% YoY, surpassing forecasts of ₩10.1 trillion. SK Hynix reported Q3 sales of ₩24.45 trillion, up 39% YoY, with operating profit jumping 62% to ₩11.38 trillion.

UBS raised SK Hynix's target price from ₩710,000 to ₩853,000 and Samsung's from ₩128,000 to ₩154,000, maintaining "Buy" ratings. Citi analyst Christopher Danely lifted Micron's target from $275 to $300.

The rally extended to A-shares. Domestic memory firms saw robust earnings growth, with Longsys' Q3 net profit soaring 1,994.42% YoY and Shannon Semiconductor's revenue up 59.9% in the first three quarters.

**How Long Will the Rally Last?** With the super cycle underway, the market is keen to gauge its duration. Samsung, SK Hynix, and Micron dominate the global DRAM market, holding over 90% combined share. Yet, their cautious stance on capacity expansion has intensified supply concerns.

At a Morgan Stanley investor conference, Samsung stated it would avoid rapid capacity expansion, instead optimizing capex to balance demand and pricing risks. SK Hynix revealed plans to shift half its DRAM output to next-gen 1c DRAM but admitted supply shortages would persist. An internal document suggested new capacity wouldn’t come online until 2028. Micron is exiting consumer DRAM to focus on data centers.

Industry experts anticipate 2026 DRAM demand growth (26%) will outpace supply expansion (20%), with TrendForce forecasting a 58% YoY price surge.

"Memory leaders are wary of overexpansion after past downturns. If AI demand falters, oversupply could trigger losses again," Li noted. However, he cautioned that soaring prices may eventually curb demand, as PC and smartphone makers like Lenovo and Dell pass costs to consumers.

Li believes the uptrend will last until late 2026 but warns of potential corrections. TrendForce’s Avril Wu added that LPDDR5 prices could spike in 2026 as AI clients outbid smartphone makers for capacity.