How long can the storage boom last?
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How long can the storage boom last?
Despite the market boom, history shows that positive growth in the memory market usually does not exceed five years, followed by a potential severe downturn.
Navigating Web3 tides with focused insightsAuthor: Takashi Torikoshi
The semiconductor industry, especially the memory market, is currently undergoing an extraordinary expansion that can only be described as "explosive growth." Words like "boom" simply cannot adequately describe this phenomenon. Just one glance at the chart will shock anyone with its sheer scale.
Figure 1 shows the three-month moving average shipment values of various semiconductors based on World Semiconductor Trade Statistics (WSTS) data from 1991 to May 2026. Over the past 30 years, despite fluctuations in the economic environment, the four major categories—Micro Devices, Memory, Logic Devices, and Analog Devices—have generally shown a steady upward trend. This represents the "normal development process" of the semiconductor industry.
Figure 1. Three-month moving average shipment value of semiconductor products by type (as of April 2026) Source: Created by the author based on WSTS data
However, since around 2024, logic circuits, and especially the recently surging memory, have shown a nearly vertical growth momentum, completely overturning traditional perceptions. In particular, the growth of memory is astonishing, almost breaking through the peak of the chart. This growth speed is so fast that the growth history accumulated over the past 30 years seems like just a warm-up.
Based on my years of experience closely observing the semiconductor market, I can say with certainty that the memory market has never seen such steep growth. This can be called a historic anomaly that is shaking the fundamental structure of the semiconductor industry.
It grew 10 times in about 10 years, with an annual growth rate as high as 285%, which is shocking. Figure 2 shows this explosive growth, focusing on the period from 2016 onwards. In 2016, the monthly shipment value of MOS memory was about $5.6 billion. After a brief boom during the "Memory Bubble" of 2017-2018, by the recession in early 2023, shipments plummeted to only $5.8 billion. This marked the lowest point of the semiconductor industry recession.
Figure 2. Three-month moving average shipment value of semiconductor products (by type) (April 2016 to April 2026) Source: Created by the author based on WSTS data
However, the recovery since then, or more precisely, the surge. As of May 2026, monthly memory shipments have skyrocketed to $63.3 billion. Compared to the 2016 level, it has grown more than 11 times in just ten years. Compared to the trough in early 2023, it has grown about 10.7 times in just a few years.
Similarly, Figure 2 shows that the scale of the logic business, including NVIDIA GPUs, has also grown from $13.3 billion to $31.6 billion, clearly demonstrating the "NVIDIA GPU Effect" and the "AI Effect." However, even the growth of the logic business appears relatively moderate compared to the explosive growth of the memory business.
In terms of growth rate, this anomaly is even more obvious. Figure 3 shows the year-over-year growth rate of the same data, with memory's recent year-over-year growth rate reaching as high as 285%, setting a historic high.
Figure 3. Year-over-year growth rate of three-month moving average shipments of various types of semiconductors (as of April 2026) Source: Created by the author based on WSTS data
For reference, even at the peak of the previous "Memory Bubble" (around 2017), the annual growth rate reached about 60%. In comparison, you can see how astonishing the current growth rate is. Observing the other three categories in Figure 3, even logic circuits are only around 40%, while microcontrollers and analog circuits are only around 14%—19%. In other words, only memory growth has truly reached "another level."
DRAM and NAND Are Growing Explosively
From the perspective of the memory market, the main driving force behind its explosive growth comes from two major memory products: DRAM and NAND flash (hereinafter referred to as NAND). Figure 4 shows the quarterly overview of the global DRAM and NAND markets based on TrendForce data.
Figure 4 Global DRAM and NAND Markets (TrendForce Forecast for Q2 2026) Source: Created by the author based on TrendForce's DataTrack data.
In early 2023, during the semiconductor industry recession, DRAM market value fell to a trough of only $9.7 billion, and NAND market value also fell to $8.7 billion. This was a dark period where all memory manufacturers fell into losses and were forced to cut production.
However, by the second quarter of 2026, the DRAM market size is expected to jump to $145 billion, and the NAND market size will reach $81 billion. Compared to the low point in early 2023, the DRAM market size has grown about 15 times, and the NAND market size has grown about 9 times. If both are added together, the quarterly total will reach $226 billion, and the annual total will exceed $900 billion, a scale that seems incredible at first glance.
Memory, once considered a "cheap standard" or "commodity" product, is now poised to seize the leadership position in the semiconductor industry from microcomputers (such as logic and MPU).
The Reason Is the Abnormal Surge in Memory and Wafer Prices
Why has the memory market expanded to such a scale? The key lies in the fact that this explosive growth does not stem solely from an increase in shipments; the biggest factor is the abnormal surge in memory prices themselves.
Figure 5 shows the trend of DRAM (DDR5 16Gb 2Gx8) spot prices and NAND (1Tb TLC Wafer) wafer prices. In early 2025, the DRAM spot price was only $4.70. Recently, prices have skyrocketed to $46.00, an increase of about 10 times. NAND wafer prices have also jumped from $2.40 to $25.00, similarly an increase of about 10 times.
Figure 5: Surge in DRAM (DDR5 16Gb 2Gx8) and NAND (1Tb TLC Wafer) Spot Prices Source: Created by the author based on TrendForce's DataTrack data
In other words, the main reason for the tenfold growth in market size is not a tenfold increase in shipments, but because the "unit price" has skyrocketed nearly ten times. Even if memory sales volume remains unchanged, revenue will grow ten times. This is the mechanism behind the explosive growth of the memory market size.
For memory manufacturers, this is an ideal environment. After all, prices can rise automatically without a significant increase in capital investment, thereby significantly improving profit margins. As will be discussed later, the surge in memory manufacturers' stock prices is also due to the rapid profit growth brought about by this abnormal price increase.
Reasons for the Price Surge
So, why have memory prices surged? This is because demand far exceeds supply, but tracing the root of this demand, we find it is thanks to the astonishingly huge investments made by hyperscale data center operators.
Figure 6 shows the capital expenditure trends of the four major hyperscale data center operators (Amazon, Google, Microsoft, and Meta). In 2015, the total capital expenditure of these four companies was only $21 billion. Even so, this was considered a "huge sum" at the time.
Figure 6: Capital Expenditure of the Top 4 Hyperscale Data Center Operators Source: Created by the author based on each company's financial reports and TrendForce data, etc.
However, since OpenAI released ChatGPT in November 2022, the generative artificial intelligence field has ushered in a boom, and the capital investment curve has also climbed sharply. It is estimated that by 2025, the total investment of these four companies will reach $355 billion, and by 2026, this figure is expected to reach an astonishing $755 billion. This represents an unprecedented investment boom, with investment amount growing about 36 times in just over ten years since 2015.
$755 billion far exceeds 120 trillion yen. Just four companies plan to invest funds equivalent to Japan's national budget (general account) in data center and artificial intelligence infrastructure construction within one year. This shows how extraordinary this situation is.
AI Data Centers Are Like "Black Holes"
The final destination of this huge investment is AI data centers. Figure 7 shows the current situation in the form of a schematic diagram.
Figure 7: Why Are DRAM and NAND Flash Prices Surging?
As hyperscale data centers compete to invest in AI data centers, semiconductors necessary for AI learning and inference: namely GPUs from companies like NVIDIA, High Bandwidth Memory (HBM) used in GPUs, and large-capacity storage SSDs equipped with NAND flash, are being sucked into the "black hole" of AI data centers one after another.
Memory manufacturers prioritize the production of high-margin HBM and high-performance DRAM and NAND flash for data centers. This is a natural business decision. Therefore, production line capacity has been shifted to the AI field, resulting in a significant reduction in capacity available for other applications.
The industries most severely affected by this are DRAM and NAND flash for digital consumer electronics products such as personal computers, smartphones, and game consoles. Memory for these products is in severe shortage, to the point of being "completely insufficient."
Due to limited supply capacity, if demand is concentrated solely on AI data centers, then memory for consumer electronics products will inevitably be exhausted. This will lead to fierce competition for limited supply, thereby driving up prices. This is directly related to the abnormal surge in memory prices mentioned earlier.
In fact, personal computer and smartphone manufacturers have begun to send out distress signals, stating that they cannot obtain the required memory, procurement costs have skyrocketed, forcing them to pass these costs on to product prices. Ironically, under the shadow of the rise of AI, the digital devices we use every day are becoming more and more expensive, and even scarcer.
Semiconductor Market Forecasts Were "Completely Wrong"
In 2023, I made a forecast on the development trend of the global semiconductor market up to 2032, as shown in Figure 8. By analyzing the history of the semiconductor industry, and combining the "PC Effect," "Internet Effect," "Smartphone Effect," and the upcoming "AI Semiconductor Effect," I predicted that the semiconductor market would grow at a rate of approximately "doubling every ten years."
This forecast expected that by 2032, the market size would reach about $1.2 trillion. At the time, I thought this was a fairly optimistic forecast.
Figure 8: 2023 Global Semiconductor Market Forecast. Data Source: Created based on WSTS data and author's forecast.
However, it turns out this forecast was completely wrong. In fact, the reason it was wrong is that it was too conservative. Please see Figure 9. According to the WSTS (World Semiconductor Trade Statistics) Spring 2026 forecast, the global semiconductor market size will reach $630.5 billion in 2024, $795.6 billion in 2025, and exceed $1.5 trillion in 2026, reaching $1.5112 trillion. In addition, it is expected to grow rapidly to $1.9137 trillion by 2027, approaching $2 trillion.
Figure 9: Due to the booming development of AI, the global semiconductor market is expanding rapidly, and forecasts are seriously off Source: Created by the author based on WSTS data and WSTS Spring 2026 Semiconductor Forecast.
In just a few years, the market size easily exceeded the author's previous forecast level of $1.2 trillion for 2032. The 2032 forecast was achieved in 2026. This does not mean that the previous forecast was "too optimistic," but rather that the disruptive power of the AI boom has completely overturned all previous conventions of the semiconductor industry.
Figure 10 clearly shows that this rapid growth is driven by memory (including DRAM and NAND) and logic circuits (including GPUs). Memory is expected to exceed $1 trillion in 2027, reflecting the explosive growth of DRAM+NAND described earlier. The logic circuit market is also expected to exceed $500 billion.
Figure 10: Rapid Growth of Memory (including DRAM and NAND) and Logic (including GPU) Source: Created by the author based on WSTS data and WSTS Spring 2026 Semiconductor Forecast.
On the other hand, the analog circuit and micro semiconductor fields have remained almost flat. In other words, the overall growth of the semiconductor market is not balanced; instead, only these two AI-related fields are growing at an unprecedented speed, driving the growth of the entire market. This is an extremely distorted growth structure.
How Long Can This Boom Last?
Now, let us answer the question everyone is most concerned about: "How long will the booming development of AI and the growth it brings last?"
The key to understanding this lies in understanding the long history of the memory market. Figure 11 shows the annual growth rate of the memory market for nearly 35 years since 1991. This chart reflects the countless ups and downs experienced by the semiconductor industry.
Figure 11: Memory Market Annual Growth Rate Source: Created by the author based on WSTS data and WSTS Spring 2026 Semiconductor Forecast.
From the boom brought by the release of Windows 95 in 1995, to the IT bubble in 2000 and its subsequent burst, to the memory bubble of 2017-2018, the collapse of Lehman Brothers in 2008, and the boom brought by the COVID-19 pandemic since 2020, the semiconductor industry has experienced roller-coaster-like booms and busts.
What is worth paying attention to here is not the height of individual peaks, but the "duration" of sustained positive growth. Careful analysis of Figure 11 reveals a key fact: in any historical period, the longest period during which the memory market maintained average annual positive growth was only five years. In the past 35 years, there has never been a situation of six or seven consecutive years of positive growth.
Why does the market stabilize after five years? Because the memory market is essentially affected by the "Silicon Cycle," which includes demand surge, price increases, companies increasing production investment, oversupply, and price plummet.
If the economy continues to prosper, companies will inevitably compete to invest in equipment, eventually leading to oversupply and plummeting prices. This is the inevitable operating mechanism determined by the nature of memory as a product.
The current AI boom is expected to drive significant growth in the memory market, starting from the trough in 2023 and peaking in 2024. According to historical laws, this boom should end by 2028 at the latest, or even peak in 2027.
Although inevitably some people will say, "This time is different" or "AI is special," we must not forget that the same statements have appeared every time a bubble economy occurred in the past.
The Higher the Mountain, the Deeper the Valley
The history of the semiconductor industry also tells us another indisputable law: "The higher the peak, the deeper the subsequent valley."
If you look at Figure 11 again, this law is obvious. The IT bubble reached a peak annual growth rate of over 50% in 2000, but in the following year, 2001, it plummeted to an abyss of -49.5%. Similarly, the memory bubble of 2017-2018 also experienced a peak of over 60%, followed by a sharp decline of 33% in 2019. In this industry, the higher the peak of prosperity, the more severe and longer the subsequent recession tends to be.
Let us examine the current AI boom again. An annual growth rate of 285% is an unprecedented peak, far exceeding any previous bubble. Its increase is so high that the peaks of the IT bubble and memory bubble seem negligible in comparison.
Applying this principle, the conclusion is obvious. After this unprecedented prosperity, the subsequent "valley" is likely to be deeper and more severe than any valley the semiconductor industry has experienced in the past. We should prepare for an extremely severe economic recession expected to start from 2027-2028, and this recession is by no means something that can be overcome half-heartedly.
Surge in Memory Manufacturers' Stock Prices and "Billionaires"
Currently, stock prices of memory manufacturers are soaring across the board. This is completely expected, because price increases have led to a significant growth in their profits.
A symbolic example is Kioxia. The company's stock price rise has enabled 600 investors, so to speak "billionaires," to obtain unrealized gains of over 1 billion yen from the stocks they hold. The entire industry is immersed in an unprecedented celebratory atmosphere.
However, we need to remain calm now. Stock prices are like a mirror, reflecting people's expectations for the future. When these expectations are too high, if reality is even slightly below expectations, stock prices will crash instantly.
The higher the mountain, the deeper the valley. This principle applies equally to stock prices, not just market size. Every time a bubble burst in the past, such a scene would appear: billionaires who became rich at the peak of the bubble had to significantly reduce their assets as the economic recession arrived.
Now is a period of economic prosperity, and it is precisely the time to make concrete preparations for an economic recession. This prosperity will not last forever. History shows that positive growth in the memory market will last at most five years, after which a trough period will follow (at least on the surface). The higher the peak, the deeper the valley. Therefore, I strongly urge companies currently enjoying prosperity: "While the prosperity continues, you should make concrete preparations for an economic recession."
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