Name: The winners and losers from the surge in memory chip prices
Uploaded: 2025-11-19T08:51:21.180Z
Duration: 5 min 10 s
Description: Eric Ross of Cascend Securities discusses the increase in memory chip prices due to the AI boom, and which industry players stand to gain and lose from this.

Eric Ross of Cascend Securities discusses the increase in memory chip prices due to the AI boom, and which industry players stand to gain and lose from this.

New York

The surge in memory chip prices is being driven by increased demand from AI and data center applications, particularly for high-bandwidth memory. Companies such as Micron and Hynix, which have a larger share of their business in this segment, are seeing significant benefits, while others like Samsung, AMD, Intel, and Apple are experiencing squeezed margins due to rising costs and limited supply.

Capacity constraints in memory production, with no major expansions in recent years, have further contributed to price increases. Although power supply could become a bottleneck for future growth, current allocations in the US are expected to be sufficient for the next two years, but substantial investment in new infrastructure will be required to meet long-term demand.

The winners and losers from the surge in memory chip prices

On a 10-year horizon, it's very difficult to pick a memory stack. It just is. He is 100% correct in that. But if you're looking at a one to three-year standpoint, I think you absolutely could pick a winner or a loser in the memory stack. And I think what's happening in the chip sector, and I'm an old guy that's actually, this is my sixth cycle in the chip sector that I've seen. So I've seen a lot of these things. But what we're seeing right now is because that this is being driven by data center AI, specifically GPUs, and you're seeing that anything that's applies to support that is getting really carried upwards. That's really where the business is. So the memory guys that are doing the high bandwidth memory, which is taking an increasingly part of their capacity, those guys are doing really well. And that really is not all the memory guys. That's really Micron and Hynix more than Samsung, for instance, and some of the other players. So if you want to look at who's really benefiting in the nearer term, I'd say, yes, NVIDIA is coming out tomorrow. You're going to play the trade. But if you want to sort of play it a little bit longer, Micron comes out in a month, and Hynix then the next month. I think you can continue to kind of play this on the memory side. Now, on the memory side, you've got a lot of capacity constraints because you haven't actually built any new capacity in the last couple of years. And 2026 looks like it's already spoken for. There is no new capacity coming online in any meaningful way. And all of it is being absorbed, or all the new capacity that's come online is being absorbed by these higher margin high bandwidth memory that's going right into AI applications. So if you're Micron or you're Hynix, and I'm saying those two specifically because they're a much heavier portion of their total revenues and total margins are in this high bandwidth memory, you're going to benefit hugely. If you're Samsung or you're another player that actually makes cell phones or other things as well, PCs, you're not going to be squeezed out not being able to get as much DRAM for the price that you want. Your margins are going to be squeezed trying to produce your prices. We're seeing regular DRAM prices are spiking right now. Even just this last week, we've seen huge spikes in DRAM for consumer applications. In some cases, we've seen, for instance, graphics memory for consumers have doubled for kits going into PC builders, what have you. I mean, they've doubled in the last month. It's just unbelievable what's going on there. So if you're stuck in the consumer side of things or you're not supplying into AI, you're going to see your margins really squashed. And so maybe a Samsung is not going to do as well. Maybe an AMD, an Intel, some of these other players that are supplying a little bit more, and Apple are going to get squeezed, I think, a little bit more on the margin side. It's not going to look as good. So Nvidia, Micron, Hynix, that side of things, excellent. Other side of things, I don't think it's going quite as well. That's the very point that we saw in a Xiaomi's earnings report as well, that memory chip prices are really soaring. But here is actually one premise that could challenge everything, the story for GPUs and all these non-fancy sort of chips as well. What if we don't have enough power? So that's another bottleneck. We don't really see the only bottleneck in memory chips. If we don't have power to generate, I mean, we don't have the power to power all these AI computing and all these data could actually stop for a while, then that could actually challenge your premise around the memory chip sector, no? Absolutely. I mean, I think power is a huge problem, particularly in the US, where we really haven't allocated enough power over the next 10 years. But I think over the next two years, we have allocated enough power. And yes, it is squeezing some of the municipal power or some of the power for other sources out. But I think that we probably are good for the data centers that have already been permitted, look like they're ready to build. Yeah, we're talking about total maybe 5 to 10 maybe gigawatts. It's a lot of power. Those are a lot of new power stations. But we do actually have capacity to supply that sort of on a more emergency basis. There is actually a lot of power production here in the US. You were talking about 30 gigawatts. Well, then you're going to be talking about 10 plus new nuclear power plants, plus all the sporting infrastructure. I mean, we really have a lot of work to get to that particular thing. So the next two years, not sure I necessarily agree with the premise. Next 10 years, I absolutely agree with the premise. We got to get off our seats and actually get these things permitted, designed and built so that way we can start supplying this.

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