Summary of Global Memory Technology Conference Call Industry Overview - **Memory Market Growth**: The global memory market is projected to experience significant growth, with DRAM sales expected to reach **US$196 billion** in 2026, representing a **51% year-over-year increase**. NAND sales are anticipated to hit **US$114 billion**, reflecting a **45% increase** [1][10]. - **ASP Increases**: Average Selling Prices (ASP) for DRAM and NAND are expected to rise by **33%** and **26%** year-over-year, respectively, contributing more to revenue than bit growth, which is projected at **14%** for DRAM and **15%** for NAND [1][10]. Key Points 1. **2026 Super-Cycle**: The memory market is expected to enter a super-cycle similar to the 1990s, driven by AI advancements and a prolonged upturn, with sales growth continuing into **2027** [1][10]. 2. **HBM Demand Growth**: High Bandwidth Memory (HBM) demand is projected to grow by **50-100% annually**, driven by new GPU and ASIC technologies, while wafer capacity growth is expected to remain below **50%** [2]. 3. **Supply Constraints**: High capital expenditures (capex) are anticipated, with SK Hynix's capex estimated at **W23 trillion** in 2025 and **W35 trillion** in 2026. However, productivity is expected to be low, leading to a production volume increase of less than **20%** year-over-year for DRAM and NAND [3]. 4. **Sustainable High ASP**: Despite spot price corrections, conventional DRAM prices are expected to stabilize between **US$10-15**, indicating a potential upside of over **50%** for contract prices [4]. 5. **Top Investment Picks**: SK Hynix is identified as the top pick in the global memory sector, with Samsung Electronics and Nanya Tech also recommended. EPS estimates and price objectives for all three companies have been raised due to favorable pricing conditions [5][6]. Company-Specific Insights - **SK Hynix**: Projected operating profit for 4Q25 and 2026 is **W16 trillion** and **W77 trillion**, respectively. The new price objective is set at **W900,000**, up from **W800,000**, with a **23%** increase in EPS estimates based on higher DRAM ASP [6]. - **Samsung Electronics**: Expected operating profit for 4Q25 and 2026 is **W15 trillion** and **W76 trillion**. The new price objective is **W150,000**, up from **W140,000**, with a **17%** increase in EPS estimates [6]. - **Nanya Tech**: Benefiting from legacy DRAM shortages, the new price objective is **NT$200**, up from **NT$178**, with a **25%** increase in EPS estimates [6]. Additional Insights - **Inventory Levels**: As of December 2025, both DRAM and NAND inventories are at **3-4 weeks**, lower than the normal **1-2 months**, indicating tight supply conditions [12]. - **Utilization Rates**: Memory chipmakers' fabs are fully utilized, excluding old idle capacity, suggesting strong demand [14]. - **Sales Mix**: The sales mix for DRAM is increasingly driven by server and smartphone applications, with servers expected to account for **55%** of DRAM sales by 2027 [17]. Conclusion The global memory market is poised for substantial growth driven by technological advancements and increasing demand across various applications. Investment opportunities are favorable for key players like SK Hynix, Samsung Electronics, and Nanya Tech, with a focus on ASP increases and supply constraints shaping the market dynamics.

Investment Rating - The report maintains a "Buy" rating for Samsung Electronics and SK Hynix, with target prices raised to KRW123,000 and KRW540,000 respectively [34][5]. Core Insights - The memory market is expected to enter an unprecedented super-cycle, driven by significant investments from US Big Tech in AI and traditional servers, leading to a substantial increase in memory demand by 2026 [1][4]. - Demand for traditional server-related memory, such as DDR4 and DDR5, is projected to grow by around 50% in 2026, while enterprise SSD demand is expected to nearly double [2]. - Operating profit margins for commodity DRAM are anticipated to recover to levels approaching 70% by 2026, while NAND margins are expected to reach 30-40% [3]. Summary by Sections Market Overview - The memory market is poised for a super-cycle, with substantial investments continuing into 2027 and 2028, followed by a likely downturn in 2028 [4]. - US Big Tech's capital expenditures are projected to increase significantly, with a 30% year-on-year growth expected in 2026 [13]. Demand Projections - Traditional server investments declined by 30% year-on-year in 2023 but are expected to grow by 20-30% in 2026 [2]. - Demand for enterprise SSDs, which account for approximately 40% of total NAND demand, is projected to grow by over 100% in 2026 due to strong storage needs from both traditional and AI data centers [2]. Profitability Forecasts - Samsung's operating profit is projected to reach KRW90 trillion in 2026 and KRW130 trillion in 2027, with a significant increase in target price reflecting this growth [5]. - SK Hynix is expected to achieve operating profit of KRW72 trillion in 2026 and KRW88 trillion in 2027, with a 50% increase in target price [5]. Competitive Landscape - Samsung is expected to have the highest relative capacity flexibility among memory manufacturers, with significant production scaling capabilities at its Pyeongtaek fabs [4]. - The entry of Samsung into Nvidia's HBM market is considered highly probable, which could enhance its competitive position [30].

Global memory Global Markets Research EQUITY: MEMORY Unprecedented super-cycle DRAM, HBM, and NAND triple super-cycle in 2026F US Big Tech's investments in both AI and conventional servers to boost 2026F memory demand; commodity DRAM/NAND OPM to reach historical high in 2026F OPM for commodity DRAM, currently at 40-50%, appears capable of recovering to levels approaching its previous peak of 70% (in 2017) by 2026F. We expect NAND operating margins, currently at break-even levels, to enter a boom phase, with ...