The supply and demand pattern in the memory chip market is tilting in favor of leading manufacturers, and the price increase cycle may be longer than what the market expects.

Goldman Sachs held a web seminar for storage industry experts on October 27th. Experts at the event stated that supply will remain tight throughout 2027, and the price increase cycle is expected to continue into the first half of 2028; the average mixed price is projected to rise by 122% year-on-year in 2027 to $3.7 per unit, driving industry revenue growth of over 230%, exceeding $200 billion.

Capacity expansion faces structural constraints such as insufficient clean room space and long equipment delivery times. TrendForce believes that it will be difficult to achieve an effective increase in supply before 2028, and this bottleneck provides continuous support for price increases. At the same time, the competitive threat from Chinese HBM suppliers is limited in the short term, with a combined market share expected to be less than 2% in 2027.

DRAM The price increase cycle may extend into the first half of 2028.

TrendForce It is expected that strong server demand and limited supply increments will continue to drive up the average price of DRAM in the coming quarters, despite the somewhat weak consumer demand acting as a drag.

The coverage rate of long-term agreements ( LTA ) reaches 60% to 70%, which may lead to a more moderate price increase in 2027. However, TrendForce indicates that the additional demand exceeding the locked volume under the agreement can still be satisfied at higher prices through negotiations, and the overall pricing trend remains upward. Taking all factors into account, TrendForce currently expects that the price of DRAM will continue to rise until the first half of 2028.

TrendForce predicts that the blended average price of HBM will increase by 122% year-on-year to $3.7 per GB in 2027, driving the revenue of the HBM industry to grow by over 230% year-on-year, exceeding $200 billion.

Price differentiation will be quite evident. TrendForce indicates that the high-end pricing for HBM4 may exceed $5 per GB, while the low-end price is close to $3 per GB. There are significant differences in the bargaining results between suppliers and customers. The 8-layer stacked HBM4 has a higher cost per unit of memory chip, so the premium per bit is expected to be between 5% and 10% compared to 12-layer stacked products; the pricing for HBM4E may be significantly higher than that of HBM4.

Goldman Sachs stated in its report that the above judgment is basically consistent with its own forecasts – the bank currently estimates that the average year-on-year increase for the main suppliers' HBM next year will be between 100% and 160%.

Capacity expansion is constrained by equipment and factory premises, making it difficult to resolve supply bottlenecks in the short term.

Despite the aggressive capital expenditure plans of leading manufacturers, TrendForce still believes that it will be difficult to achieve a significant increase in DRAM production capacity before 2028. The main bottlenecks are insufficient clean room space and long delivery times for semiconductor equipment.

TrendForce It is estimated that each Korean manufacturer will be able to add 80,000 to 100,000 wafers per month in production capacity by 2027 ( WPM ). However, it is expected that most of the additional production capacity of Samsung Electronics will be used for HBM , and the growth in bits for traditional DRAM mainly relies on process migration. The equipment supply situation is expected to gradually improve from the second half of 2027, and the substantial contribution of new wafer factories to supply is not expected to be evident until 2028. TrendForce also points out that suppliers may actively adjust their expansion pace according to demand prospects.

TrendForce indicates that Google is becoming an important driving force for the growth in demand for HBM. As the deployment ratio of TPU in the Google data center continues to increase, the demand for bits of HBM3E is expected to be supported next year, which means that the demand for HBM will be distributed across generations, rather than being concentrated in HBM4 and HBM4E.

At the same time, due to the significant premium pricing of HBM4, it is expected that HBM4 will account for nearly 60% of the HBM industry revenue in 2027 for TrendForce.

TrendForce believes that despite Chinese storage manufacturers continuously increasing their production capacity and technological investment, there is still a significant gap between them and leading suppliers in terms of technical capabilities and yield rates. Therefore, the competitive risk they pose to the global HBM market in the short term is limited.

Goldman Sachs reaffirmed its buy rating on Samsung Electronics' common shares and preferred stocks, with 12-month target prices of 500,000 Korean won and 380,000 Korean won respectively. The valuation is based on the method of summing up the classifications of EV / EBITDA expected for 2026 to 2027 ( SOTP).

SK The target price for Hynix is 3.5 million Korean won, based on the average expected price-earnings ratio (P/E) from 2026 to 2027, which corresponds to a target valuation multiple of 9.0 times. The buy rating is also maintained.