AI Memory Price Boom May Be Nearing Its End, Analysts Warn
Analyst reports suggest that the surge in memory chip prices driven by AI may be approaching its conclusion. Last week, Morgan Stanley cautioned that the memory cycle is set to enter its later phase in Q4, characterized by slower price growth and increasing inventories. Bernstein Research projected a 17% rise in conventional DRAM contract prices for Q3, a significant decrease from the 65% spike in Q2. Major players in the memory sector, such as Micron, SK Hynix, and SanDisk, have experienced declines in their stock prices as investors reevaluate the sustainability of the boom. Additionally, UBS predicts that ChangXin Memory Technologies (CXMT) will nearly double its DRAM capacity by late 2028, raising concerns about global supply amidst persistent demand from data centers.
Key facts
- Morgan Stanley warned that the memory cycle would enter its late stage in Q4 2025.
- Bernstein Research noted that conventional DRAM contract prices are expected to rise about 17% in Q3 2025, down from a 65% jump in Q2 2025.
- Shares of Micron, SK Hynix, and SanDisk have retreated from recent highs.
- UBS expects CXMT to nearly double its monthly DRAM capacity from 240,000 wafer starts at end of 2025 to 466,000 by late 2028.
- CXMT's share of global DRAM bit supply is projected to rise from about 7% to 10%.
- AI demand is keeping memory supplies tight, but slower pricing momentum and expansion by CXMT and YMTC are raising questions.
- Data-centre spending continues to fuel appetite for high-end memory.
- The steep price increases have driven record profits over past quarters.
Entities
Institutions
- Morgan Stanley
- Bernstein Research
- UBS
- Micron
- SK Hynix
- SanDisk
- ChangXin Memory Technologies (CXMT)
- YMTC