Bernstein Research Report Analysis: After Memory Outperformed Semiconductor Equipment by 661%, History Says It's Equipment's Turn
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Bernstein Research Report Analysis: After Memory Outperformed Semiconductor Equipment by 661%, History Says It's Equipment's Turn
The real judgment is that even if storage trades sideways, equipment has its own upward logic, rather than predicting that storage will decline.
Navigating Web3 tides with focused insightsBy: Rita
TechFlow Guide
Since June 2025, the memory sector has cumulatively outperformed semiconductor equipment by 661 percentage points. If memory corrects, will equipment follow suit? This is the most anxiety-inducing question for investors at the moment. Bernstein addressed this question today using historical data, concluding that equipment has its own rhythm, and history has provided the answer. To verify this conclusion, Bernstein selected the top companies in memory and semiconductor equipment as benchmarks, reviewed stock price data spanning over a decade, and identified two key divergence periods.
Historical Correlation Between Equipment and Memory Is Not as High as Imagined
Bernstein selected the top three memory companies (Samsung, SK Hynix, Micron) and the top five equipment companies (Applied Materials, Lam Research, ASML, KLA, Tokyo Electron) as benchmarks. From 2012 to 2018, the rolling correlation mean between the two was only 0.4. Although it rose after 2019, it was only 0.6. In contrast, the correlation between equipment stocks and the Philadelphia Semiconductor Index during the same period was as high as 0.8 to 0.9. The general direction of equipment stocks follows the entire semiconductor sector, while memory is often the one that deviates.
History Shows Multiple Instances of Equipment Rising While Memory Falls
Bernstein cited two typical divergence periods. From January 2015 to December 2016, stock prices of the top five equipment companies rose 21.9%, memory fell 16.2%, and equipment relatively outperformed by 38.2%. From January 2021 to December 2022, equipment rose 15.3%, memory fell 34%, relatively outperforming by 49%. The two divergence periods lasted up to two years, not brief deviations. Equipment and memory can move in different directions, forming a diversification effect in investment portfolios, rather than being passively bound.
After 661% Excess Returns, Mean Reversion May Occur
From 2011 to 2019, long-term returns of equipment and memory were roughly flat. From 2019 to June 2025, memory consistently underperformed equipment, only catching up by February 2026; over 15 years, the cumulative gain for both was 36 times. Since then, memory accelerated upwards and has significantly outperformed equipment by 661% to date. Bernstein's core logic is: if mean reversion occurs, relative returns in the next phase may tilt towards equipment.
The Long-Term Logic for Equipment Has Not Changed
SK Hynix recently announced an additional investment of 100 trillion KRW (approximately 67 billion USD) in a new wafer fab in Cheongju, and the South Korean government is considering supporting Samsung and SK Hynix in building wafer fabs in the southwest region. Even if memory prices normalize in 2027, logic and foundry investment along with memory expansion dual-wheel drive are sufficient to support continued growth on the equipment side. Bernstein expects equipment market and company EPS still have room for upward revision before 2028.
TechFlow Perspective
The real judgment is that even if memory trades sideways, equipment has its own logic for rising, rather than predicting memory will fall. SK Hynix's 67 billion USD is already announced construction in progress, equipment orders are certain revenue, having no necessary connection with short-term fluctuations in memory secondary market prices. The market bundles equipment and memory pricing, but historical data shows this bundling is excessive. When certain capital expenditure meets 661% mean reversion pressure, the odds for equipment are becoming asymmetric.
Disclaimer
This article is a compilation and interpretation by TechFlow Research of a third-party broker research report (Bernstein, July 13, 2026). Ratings, target prices, earnings forecasts, and related judgments cited in the text are the views of the broker's analysts, representing only the position of their affiliated institution, do not represent the views of TechFlow Research, nor constitute any investment advice.
The market involves risks, decisions must be independent. This article should not be used as a basis for buying or selling any securities.
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