TechFlow reports, on July 18, Citrini analyst Jukan published an analysis pointing out that besides the impact of leveraged fund liquidations, the recent decline in memory chip stocks may also reflect the market pricing in pressure from future supply expansion in advance. Even if the global memory shortage continues until 2027, most research institutions and industry observers still expect supply-demand tightness to begin easing in 2028. As memory manufacturers such as Samsung Electronics and SK Hynix announce large-scale wafer fab expansion plans, the market may have already started to reflect the impact of new capacity release after 2028 in advance.
There is a general rule in the traditional memory industry: memory stock prices usually reflect peak memory prices about two quarters in advance, but in the new cycle driven by AI, could the market price in future supply-demand changes even earlier, such as three or even four quarters in advance. The AI era may bring new changes; the logic of "price reductions leading to revenue declines" in traditional memory cycles may not fully apply to the AI infrastructure market.
Jukan stated that the key difference lies in the fact that in the AI era, "demand growth driven by price declines" may buffer the impact of the downward cycle of memory prices. If this logic holds, future earnings volatility for memory companies may be lower than in past cycles, and may also support higher valuation levels.
