Global memory stocks surged on Wednesday after executives and investors highlighted structural supply constraints and escalating investment plans in the sector, reframing memory chips as a strategic bottleneck rather than a cyclical commodity.
Nvidia’s Q2 revenue reached $96.2 billion, with the company guiding Q3 revenue to $108 billion. Gross margins are projected to decline to 71–72% in the near term due to higher memory costs, but are expected to recover toward 72–73% by fiscal 2028 as supply tightens. Speaking at the Jefferies Semiconductor Conference on August 27, Nvidia acknowledged facing "extreme" pricing conditions in DRAM and HBM, noting insufficient supply to meet demand. To optimize limited die capacity, the company is evaluating alternative HBM configurations, including shifting from 12-Hi to 8-Hi stack designs, while treating DRAM and substrates as critical supply-chain constraints.
SK Hynix marked a milestone on August 27 by breaking ground on a $4 billion HBM packaging facility in Indiana, with production scheduled to begin in the second half of 2029. The company’s shares rose 2.49% to ₩1,730,000, bringing year-to-date gains to 165.75% and one-year returns to 565.38%. Kioxia Holdings, meanwhile, announced plans to invest over ¥1 trillion ($6.3 billion) in a new NAND flash memory fabrication plant in northern Japan. Kioxia’s shares climbed 5% to ¥52,500, with year-to-date and one-year gains of 362.56% and 2,073.91%, respectively.
Moody’s upgraded SanDisk Corp to Ba1 on August 27, citing zero funded debt, $4.8 billion in cash and projected annual revenue growth exceeding 45%. The credit agency also projected SanDisk’s free cash flow could approach $20 billion annually. SanDisk’s shares, however, dipped 1.54% to $1,476.31 on August 27, though year-to-date and one-year performance remain strong at 504.26% and 2,948.10%, respectively. The Roundhill Memory ETF added 3.6% on the same day.
Industry executives speaking at the Jefferies conference emphasized that supply, not demand, is the primary limiting factor in the memory market. The combined investment commitment from Kioxia and SanDisk in Japan totals $31 billion through 2032, aimed at expanding NAND supply capacity to meet long-term demand driven by artificial intelligence and data center applications.
