DRAM contract prices are expected to peak in 4Q26, and NAND supply and demand will remain tightly balanced until 2028. Pay attention to the sustainability of AI capital expenditure
Morgan Stanley raised three core debates around the memory cycle: AI spending, long-term agreement revaluation, and cycle position.
Morgan Stanley raised three core debates around the memory cycle: AI spending, long-term agreement revaluation, and cycle position. It pointed out that DRAM contract prices are expected to peak in the fourth quarter of 2026, and DRAM and NAND inventories have rebounded during the same period. Research and analysis of the NAND supply and demand pattern under YMTC's capacity expansion predict that if AI capital expenditures continue to grow and YMTC's capacity expansion is restrained, the NAND market will maintain a tight balance until 2028. The market has concerns about the memory cycle peaking, but there are differences in judgment on the specific time point and sustainability. MS's 4Q26 peaking expectation provides a reference for the market. One-sentence conclusion: DRAM prices are expected to peak in 4Q26, NAND is expected to maintain a tight balance until 2028 under the support of AI demand, and the memory cycle has not yet ended, but has entered the second half. Positive/negative: Positive for memory manufacturers such as Samsung Electronics (005930.KS), SK Hynix (000660.KS), and Micron (MU.US). The market's concerns about the peak of the memory cycle have been partially reflected, but pricing for NAND's long-term tight balance and AI demand support may be insufficient. Catalysts: 1) Monthly trends in DRAM and NAND contract prices; 2) Quarterly data on AI capital expenditures; 3) YMTC capacity expansion progress.