Memory ‘hunger game’ begins. Here’s what you need to know

JPMorgan analysts project an unprecedented multi-year upcycle in the global memory market, forecasting the Total Addressable Market to reach ~$300 billion by FY27E, primarily driven by soaring datacenter compute demand and HBM4E. They anticipate a four-year DRAM pricing upcycle through 2027, with high-bandwidth memory (HBM) comprising 43% of DRAM value by then and its TAM reaccelerating to $90 billion. Despite near-term valuation concerns, the firm remains constructive on memory names, favoring SK Hynix, Samsung Electronics, and Micron, citing strong HBM economics and expected NAND price growth.

Analysis

JPMorgan analysts project an unprecedented, multi-year upcycle for the global memory market, forecasting the Total Addressable Market (TAM) will expand to approximately $300 billion by FY27, a 6%-24% increase over previous estimates. This growth is predominantly driven by soaring datacenter compute demand, specifically for High-Bandwidth Memory (HBM). The firm anticipates a four-year DRAM pricing upcycle from 2024 through 2027, an event without historical precedent, which is expected to establish a higher trough for average selling prices (ASPs). HBM is central to this thesis, with its share of DRAM value projected to reach 43% by 2027 and its specific TAM reaccelerating to $90 billion, supported by a tight supply-demand balance. In the competitive landscape, SK Hynix is expected to lead HBM4 qualification, with Samsung and Micron competing for the remaining wallet share. The positive outlook extends to the NAND market, where underinvestment is forecast to fuel a 7% blended ASP growth in FY26. Consequently, memory capex is projected to rise 7-12% in 2026-27, with a strategic focus on DRAM. Despite acknowledging that near-term valuations appear stretched, JPMorgan maintains a constructive stance on memory stocks, reiterating a preference for SK Hynix, Samsung Electronics, and Micron.

Key Decisions for Investors

• Consider overweighting exposure to the memory semiconductor sector to capitalize on the forecasted unprecedented four-year DRAM pricing upcycle and a structural TAM expansion to ~$300 billion by 2027.
• Prioritize investments in companies with a clear lead or strong competitive position in the high-margin HBM market, as this segment is expected to drive 43% of DRAM value and reaccelerate to a $90 billion TAM.
• Acknowledge that near-term valuations are described as stretched, suggesting a strategy of accumulating positions on any pullbacks rather than chasing current prices, particularly for the favored stocks SK Hynix, Samsung, and Micron.
• Closely monitor memory company capital expenditure plans, as the projected 7-12% rise in 2026-27 and prioritization of DRAM could influence the tight supply-demand balance crucial to the pricing thesis.