V i e w p o i n t | 22 Sep 2025 06:17:00 ET │ 10 pages Global Semiconductors Memory Pricing Update: Raising 4Q25E & 2026E ASP Growth Estimates on Multiple Tailwinds from Commodity Memory CITI'S TAKE Digitimes reported (17-Sep) that 4Q25E memory contract price increased +15~20% QoQ due to supply shortages and aggressive memory procurement by CSPs. However, while we see negotiations for 4Q contract pricing likely settling in late-Sep, we project 4Q25E DRAM/NAND ASP growth to register +12%/+6% QoQ (vs. +5%/3% ...

View on memory pricing: 1) HBM pricing: Details on next year's HBM volume/pricing with the largest customer is still unclear, but we expect an agreement to be done within the current month. Given the increased difficulty in meeting the requirement for HBM4, we think there could be some upside to our base case pricing assumption, but even in this case expect blended HBM ASP for next year to decline close to double-digit% yoy, especially as our expectation for HBM3E 12Hi pricing declining materially is unchan ...

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Memory Semiconductor Industry, specifically focusing on High Bandwidth Memory (HBM), DRAM, and NAND sectors [1][3][30] Core Insights and Arguments - **HBM Pricing Trends**: - HBM pricing power is expected to decline in 2026 due to increased competition and supply, with HBM3e 12-hi price negotiations likely to be lower [2][17] - Current pricing for HBM3 has decreased by approximately 15%, with expectations for HBM3E pricing to range between $1.56 and $1.74 per Gb in 2026, down from $1.88 per Gb in 2025 [17] - Samsung is anticipated to rejoin the Nvidia supply chain, which could lead to further pricing pressures [15][19] - **DRAM Market Dynamics**: - A "double dip" cycle is confirmed, driven by demand rather than supply, with expectations of a downturn continuing into the first half of 2026 [3][21] - Customers are resisting price hikes for 3Q contracts, indicating a cautious demand outlook [25] - The overall DRAM market is projected to experience slight oversupply into 1H26, with a potential downturn in pricing [26][27] - **NAND Market Conditions**: - NAND margins were negative in 2Q, with expectations for a mixed pricing outlook in 3Q and 4Q [4][31] - Demand for NAND is expected to remain muted, particularly in the smartphone segment, while server demand remains strong [31] - YMTC is expanding capacity, which may influence market dynamics in 2026 [31] Additional Important Insights - **Stock Performance**: - The market is currently favoring Samsung Electronics despite a preliminary earnings miss, contrasting with the negative reactions to strong guidance from competitors like Hynix and Micron [10][13] - The relationship between valuation and fundamentals is highlighted, suggesting that lower valuations may not require strong fundamentals for stock performance [5] - **Future Outlook**: - The memory market is expected to face significant oversupply in 2026, which could lead to further pricing declines [19][21] - The anticipated growth in HBM demand is projected at 67% YoY from 2025 to 2026, but supply is expected to outpace this demand, leading to a sufficiency ratio of only 29% [20][21] - **Strategic Recommendations**: - Preference for Samsung Electronics is noted due to its potential to capitalize on the evolving HBM landscape and its competitive positioning [5][15] - Analysts recommend focusing on value tech stocks rather than the most expensive memory stocks, as earnings growth is expected to shift [13] This summary encapsulates the critical insights and projections regarding the memory semiconductor industry, particularly focusing on HBM, DRAM, and NAND markets, along with strategic stock recommendations.