TechFlow news, according to TechFlow Research, Bernstein's July 13 report pointed out that, since June 2025, the memory sector has cumulatively outperformed semiconductor equipment by 661 percentage points. This has generated a common concern in the market: if memory corrects, will equipment follow suit and fall? Bernstein used ten years of historical data to address this question. Equipment and memory are not highly bound, with correlation remaining low over the long term, and equipment has twice shown independent performance when memory weakened.
Both divergence periods lasted about two years, with equipment's relative outperformance being significant. From 2019 to mid-2025, memory continuously underperformed equipment for as long as six years, until February 2026 did it finally catch up at the level of a 36-fold cumulative gain over 15 years. Since then, memory has accelerated its rise, with excess returns accumulating to extreme levels.
If mean reversion occurs, equipment is expected to gain relative returns. SK Hynix has announced a $67 billion capacity expansion plan, and equipment orders represent certain revenue. Bernstein gave Outperform ratings to Applied Materials AMAT, Lam Research LRCX, and ASML, with target prices of $525, $340, and €2300 respectively.
