Global Memory Tech Weekly theme: Rising optimism for 1Q/2Q ASPs and profits; lift global forecasts Industry Overview Memory sales likely to remain upbeat in 1Q and even 2Q Asian tech companies typically operate at reduced levels during the Lunar New Year holidays. Yet, we observed markedly different business activity this week vs Jan or a year ago, as our channel check indicates stronger chip orders, higher contract prices and more active new product development (12-13 Gbps HBM4, PCIe Gen5 eSSD, 1c node DRA ...

20 January 2026 | 9:21PM KST Equity Research Asia Pacific Technology: Semiconductors - Memory: Nanya Tech 4Q25 read-across: Significant DRAM margin improvement for all major On January 19, Taiwanese DRAM producer Nanya Technology (Nanya; Not Covered) reported its 4Q25 earnings (December quarter), and we provide a read-across to our covered Korean Memory suppliers, SK Hynix (Hynix) and Samsung Electronics (SEC). Key takeaways were: 1) Significant DRAM margin improvement for all major players, 2) 1Q26 ASP out ...

Summary of J.P. Morgan Global Memory Market Conference Call Industry Overview - The conference call focused on the **Global Memory Market**, particularly the **semiconductor** sector, highlighting the increasing demand for memory driven by data center compute needs and the AI boom [3][38]. Key Insights 1. **Memory Market Growth**: - The memory Total Addressable Market (TAM) is expected to grow by **6%-24%**, reaching approximately **$300 billion** by FY27E, primarily driven by High Bandwidth Memory (HBM) and new applications like SOCAMM2 and GDDR7 [3][38]. - The **DRAM pricing upcycle** is anticipated to last from **2024 to 2027**, marking an unprecedented four-year cycle [3][55]. 2. **High Bandwidth Memory (HBM)**: - HBM value share is projected to account for **43%** of the DRAM market by **2027** [3][55]. - The blended HBM Average Selling Price (ASP) is expected to rise in FY26E, supported by a **35% pricing premium** for HBM4 [3][39]. - HBM TAM is forecasted to reach **$90 billion** by FY27E, with a tight supply-demand balance expected throughout the year [3][39]. 3. **NAND Market Dynamics**: - NAND pricing is expected to increase by **7%** in FY26E due to recovering demand and HDD shortages [4][40]. - The transition from HDD to eSSD is becoming more prevalent, particularly for AI applications, which is expected to drive NAND demand [4][40]. 4. **Capex and Capacity Expansion**: - Memory capital expenditures (capex) are projected to rise by **7%-12%** in FY26-27E to meet increasing demand [5][41]. - DRAM capacity expansion is prioritized over NAND due to better economic prospects associated with HBM [5][41]. 5. **Stock Performance and Valuation**: - Memory stocks have surged, with the top three memory makers valued at **$734 billion** in 2025E, with potential upside to **$1 trillion** based on historical trading multiples [6][54]. - Current stock valuations are seen as slightly above forward-looking revenue, indicating potential for further growth [6][54]. 6. **AI Demand Impact**: - AI applications are expected to represent over **50%** of DRAM TAM by 2027E, with HBM being a significant contributor [28][38]. - The demand for memory is broadening across all applications, necessitating upgrades to lower latency and more efficient memory solutions [8][38]. Additional Considerations - The memory market is experiencing a **structural shift** due to the increasing importance of HBM and AI applications, which may not align with historical memory cycle patterns [55]. - The competitive landscape is evolving, with companies like SK Hynix (SKH) positioned favorably for HBM4 qualifications, while SEC and Micron (MU) are expected to compete for market share [3][56]. This summary encapsulates the critical insights from the J.P. Morgan conference call regarding the global memory market, emphasizing growth prospects, pricing dynamics, and the impact of AI on memory demand.

Summary of J.P. Morgan's Memory Market Update Industry Overview - The report focuses on the **memory industry**, particularly **DRAM** and **HBM (High Bandwidth Memory)** solutions, as discussed during the **SEMICON Taiwan 2025 Memory Executive Summit** [1] Key Insights 1. **Long-term Growth Prospects**: - Positive outlook on long-term DRAM growth driven by: - Increasing custom silicon needs for next-gen HBM solutions - Enhanced power savings contributions - Development of emerging memory solutions (CXL, PIM, Z-NAND, CUBE) - New memory solutions for edge AI applications - Pathfinding to higher capacity through hybrid copper bonding [1] 2. **Custom HBM's Role**: - Transition from passive to active memory solutions, with custom HBM (cHBM) becoming integral to AI infrastructure design - Memory makers are focusing on tailored features and processing capabilities to meet diverse customer needs - Collaboration with foundries and supply chain partners is emphasized [1] 3. **Power Consumption and AI**: - AI's explosive power consumption is leading to a critical role for HBM in total cost of ownership (TCO) savings - Datacenter power consumption is projected to rise from 1.5% in 2025 to 3.0% by 2030, with AI servers expected to account for 65% of datacenter power consumption by 2030, increasing 56 times compared to 2023 [7] - Memory makers are addressing design challenges to meet power-saving requirements, with SKH highlighting the importance of higher stack and bandwidth [7] 4. **Emerging Memory Solutions**: - Memory makers are targeting the commercialization of emerging memory solutions for specific applications - Notable developments include Samsung's LPD5X-PIM and SEC's SOCAMM2, which offers a 70% smaller form factor compared to DIMM [12] 5. **AI Inferencing Growth**: - Shift from AI training to AI inferencing is expected to drive growth in edge AI hardware, with a projected 21% CAGR from 2023 to 2030, reaching a total addressable market of $50 billion [12] - Memory suppliers are preparing advanced edge AI solutions for market adoption in the next 2-3 years [12] 6. **Hybrid Bonding Solutions**: - Increasing commitment to hybrid bonding solutions in HBM, with expectations of higher layer stacking and better thermal resistance [15] - SKH has completed HBM4 development, supporting speeds of 10Gb/s+, ahead of competitors [15] 7. **Investment Recommendations**: - Memory shares have risen 27% in the last month, driven by strong AI demand and improved pricing expectations for conventional memory [15] - The memory sector's risk-reward profile is viewed favorably over the next 6-12 months, with SKH and SEC recommended as top picks [15] Additional Important Points - The report highlights the importance of R&D investment in hybrid bonding technology and the expected impact of HBM4 qualification on pricing negotiations [15] - The ongoing strength in AI demand is anticipated to maintain tight supply-demand conditions until new capacity expansions begin in 2027 [15]

Investment Rating - The report maintains an "Overweight" (OW) rating for SK Hynix, Samsung Electronics, and Micron Technology, indicating a positive outlook for these companies in the memory market [25][27][29]. Core Insights - The HBM4 qualification timeline is largely unchanged, with expectations for customer sampling results by November 2025 and small volume production in Q1 2026. Hynix is positioned to potentially lead in setting specification standards [3][4]. - Memory makers are responding to NVDA's request for higher HBM4 read/write speed specifications, which could impact qualification timelines and yield rates. The initial HBM4 specifications are expected to align with JEDEC4 standards [3][5]. - The total addressable market (TAM) for HBM4 in 2026 is projected to be between $8 billion and $9 billion, with SK Hynix expected to capture the majority of this market share [4][5]. Summary by Sections HBM4 Qualification and Market Dynamics - HBM4 qualification is anticipated to begin with customer sampling in late 2025, with Hynix and Samsung expressing confidence in meeting the new specifications [3][4]. - The competitive landscape is intensifying, with NVDA adopting a conservative approach to supplier qualification, which may lead to price negotiations among memory makers [3][4]. Pricing and Profitability - HBM4 pricing is expected to be 30-40% higher than HBM3E due to increased complexity and die size, with both memory makers aiming to maintain profitability through high price premiums [5][8]. - HBM3E pricing may face downward pressure as demand shifts towards HBM4, with potential upside risks in the ASIC segment [5][8]. Long-term Growth and Market Trends - The report emphasizes the long-term growth potential of the HBM market, particularly driven by AI inferencing needs, projecting a 47% CAGR from 2024 to 2029 [5][8]. - Memory consumption is expected to increase significantly, necessitating higher bandwidth solutions to support advanced AI applications [5][8].

Investment Rating - The report maintains an "Overweight" (OW) rating for SK Hynix, Samsung Electronics, and Micron Technology, indicating a positive outlook for these companies in the memory market [25][12]. Core Insights - The HBM4 qualification timeline is largely unchanged, with expectations for customer sampling results by November 2025 and small volume production in Q1 2026. Hynix is positioned to set the specification standard first [3]. - Memory makers are confident in meeting the higher HBM4 read/write speed requirements, with SK Hynix historically outperforming in speed and Samsung aiming for robust performance [3]. - The total addressable market (TAM) for HBM4 in 2026 is projected to be between $8 billion and $9 billion, with SK Hynix expected to capture the majority of the supply [4]. - HBM4 pricing is anticipated to increase by 30-40% compared to HBM3E due to larger die sizes and complexity, with both memory makers prioritizing high price premiums to maintain profitability [5]. - The long-term growth thesis for HBM is supported by increasing memory consumption driven by AI applications, with OMDIA projecting a 47% CAGR from 2024 to 2029 [5]. Summary by Sections HBM4 Qualification and Market Dynamics - HBM4 qualification is expected to follow a timeline with customer sampling results by November 2025 and production starting in Q1 2026, with Hynix likely leading the qualification race [3]. - The memory makers have received requests to increase HBM die speed from 8Gbps to 10Gbps, which could impact the qualification timeline if strict requirements are enforced [3]. Pricing and Market Share - HBM4 pricing is set to increase significantly, with both memory makers aiming for price parity with conventional DRAM, indicating a more favorable pricing environment for HBM products [5]. - The report suggests that the HBM3E pricing may trend downwards as the market transitions to HBM4, with potential upside risks from the ASIC segment [5]. Long-term Market Outlook - The report emphasizes the growing demand for HBM driven by AI applications, with expectations for significant increases in memory consumption and partnerships for seamless integration [5]. - OMDIA's projections indicate a strong growth trajectory for the HBM market, with a focus on AI inferencing driving the next phase of growth [5].

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the High Bandwidth Memory (HBM) industry dynamics, addressing investor FAQs regarding pricing, specifications, and capital expenditure implications for HBM supply and demand [1][4]. Core Insights - **Market Positioning**: The pecking order in the Asian memory space is maintained as SK Hynix (SKH) > Samsung Electronics (SEC) > Nanya Technology (NYT) [1]. - **Design Control**: NVIDIA (NVDA) is expected to take control of base die design for HBM4E, which is seen as a move to manage HBM costs and diversify suppliers [4]. - **Value Distribution**: There are two approaches for HBM4E: custom HBM die for performance differentiation and commodity HBM die for mainstream markets. Memory makers will still play a critical role in yield management [4]. - **Heat Dissipation**: As HBM4 specifications rise, heat dissipation becomes crucial, with increased reading speed requirements from ~8Gbps to 10Gbps [4]. - **Qualification Timeline**: SKH is leading the HBM4 qualification process, with customer sampling expected soon, while other competitors are slated to begin later [5]. Pricing and Revenue Projections - **HBM Pricing Outlook**: The base case pricing for HBM4 is maintained at approximately $19/GB, with a potential 30-40% premium over HBM3E expected [6]. - **Revenue Scenarios**: - Bull case for HBM revenue in 2026 is projected at $30.744 billion, while the bear case estimates $25.130 billion, indicating a potential downside of 18% [8]. - Operating profit for HBM in the bull case is estimated at $18.197 billion, with a bear case of $12.528 billion, reflecting a 31% downside [8]. Demand and Supply Dynamics - **Capex Trends**: Major cloud service providers (CSPs) are increasing their capital expenditure, which is expected to boost HBM bit demand in 2026 [6][19]. - **Bit Demand Forecast**: HBM bit demand is projected to grow from 279 million GB in 2023 to 4,161 million GB by 2027, with a potential supply surplus emerging in 2026 [19]. - **ASIC Demand Impact**: An additional 10% demand for ASIC chips could lead to a 3% increase in bit procurement demand, indicating a slight oversupply situation [6]. Market Sentiment and Stock Performance - **Memory Stock Outlook**: The medium-term outlook for memory stocks remains constructive, with expectations of gradual share price recovery as the market adjusts to ongoing operational profit growth [23]. - **Recent Performance**: SEC shares have outperformed SKH in the recent month, attributed to new foundry orders and a better-than-expected HBM outlook for the second half of 2025 [23]. Additional Considerations - **Conventional Memory Trends**: The DRAM market is expected to remain tight, with rising ASP trends noted in conventional memory, driven by strong demand from server customers [23]. - **Market Risks**: The key debate centers around 2026 HBM pricing and supply-demand dynamics, with potential negative impacts on near-term memory share prices due to the lack of new catalysts [23]. This summary encapsulates the critical insights and projections regarding the HBM industry and its key players, providing a comprehensive overview for investors and stakeholders.