Regarding the topic of the article, this structural vacuum for standard memory is fascinating. Do you think the Tier 2 gains are sustainable long term or just a temporary side effect of the HBM rush? Your insight into these market dynamics is truly brilliant.
Usually the DRAM cycle is <2 years and priced by the stocks in the first yr. This cycle is different in that the HBM and 1:3 dynamic means a lot of traditional DRAM capacity has been removed. That means there’s both underlying demand growth and capacity removal (2 drivers) of this upcycle. However countering that is Chinas capacity plans set to really ramp in 2027
Traders will be skeptical of a longer cycle given past experience. DRAM is low end silicon and OEMs double and triple book orders when it gets scarce only
To cancel those later. The stocks have already priced more than a conventional cycle in P/Bk terms in only 6 mths. I personally think there’s a lot of digestion necessary for 6 mths to see where the S/D balance is heading.
The whole industry is very aware of China’s coming DRAM capacity additions. I suspect industry margins o. DRAM will be smashed in 2027 and take years to recover. So the HBM pivot is necessary and aligns with years of AI demand plus chinas relative disadvantage in that space with EUV export restrictions
Regarding the topic of the article, this structural vacuum for standard memory is fascinating. Do you think the Tier 2 gains are sustainable long term or just a temporary side effect of the HBM rush? Your insight into these market dynamics is truly brilliant.
Usually the DRAM cycle is <2 years and priced by the stocks in the first yr. This cycle is different in that the HBM and 1:3 dynamic means a lot of traditional DRAM capacity has been removed. That means there’s both underlying demand growth and capacity removal (2 drivers) of this upcycle. However countering that is Chinas capacity plans set to really ramp in 2027
Traders will be skeptical of a longer cycle given past experience. DRAM is low end silicon and OEMs double and triple book orders when it gets scarce only
To cancel those later. The stocks have already priced more than a conventional cycle in P/Bk terms in only 6 mths. I personally think there’s a lot of digestion necessary for 6 mths to see where the S/D balance is heading.
The whole industry is very aware of China’s coming DRAM capacity additions. I suspect industry margins o. DRAM will be smashed in 2027 and take years to recover. So the HBM pivot is necessary and aligns with years of AI demand plus chinas relative disadvantage in that space with EUV export restrictions