Micron Technology Earnings and Massive DRAM Supply Shortfall Until 2028 Lead to Record Memory Price Jumps and Global Panic Buying Behavior
Micron Technology posted better than expected earnings and guidance, generating optimistic views on a prolonged upward cycle of memory industry. GF Securities financial analyst expected the DRAM supply shortfall to remain until 2028, which led to raising the target price for Micron to 2021. GF Securities expected a massive demand supply imbalance caused by systemic underproduction, and continuously rising enterprise workloads.
Alongside the world wide reappraisal, Morgan Stanley published increased financial target levels for several large memory manufacturers. Nanya Technology received an increased fair value stock estimate of 550 TWD, Winbond of 288 TWD, Macronix of 220 TWD, and Powerchip of 111 TWD. Morgan Stanley proposed an optimisticscenario for Nanya Technology, claiming a return to 1160 TWD from 510 TWD should DRAM pricing keep up its aggressive level, 1a and 1b nanometer expansion processes speed up, and regional competition from China and South Korea decrease.
The GF Securities supply chain investigation suggests that contract price negotiation in Q3 has jumped several orders of magnitude beyond earlier expectations, with DRAM contracts jumping 30% QoQ, while NAND is set for a 40% to 50% QoQ margin jump a steeper jump than the 15% and 30% that were originally feared for DRAM and NAND respectively. Morgan Stanley revealed that corporate clients are shoring up inventories ahead of a potential supply crunch, with procurement cycles quickening in a panic buying frenzy. Channel inventory is at an extremely critical 2 weeks or less and is set to support a double digit price boost in DDR4 pricing through Q4.
Evolving Server Architectures and Supply Reallocations The shortage is further compounded by architectural shifts in enterprise storage and server deployments. In the NAND sector, enterprise hard disk drives are moving away from MLC NAND to utilize SLC NAND for managing firmware, hot data, and bad track mappings. This transition is projected to drive a 50% to 60% price increase in Q3, with the upward momentum extending into Q4. Meanwhile, the NOR Flash segment faces localized supply contraction as Micron reduces its NOR Flash output in H2 to prioritize DRAM and NAND fabrication. Simultaneously, the launch of Vera Rubin AI servers in H2 will require a 50% higher volume of NOR Flash compared to preceding Grace Blackwell server models. Consequently, Morgan Stanley forecasts a 30% to 40% surge in NOR Flash pricing in Q3, with further price appreciation anticipated through the end of Q4.
