DRAM prices doubled, and Samsung and SK Hynix's Q1 profits are also expected to double!

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The global storage chip market is undergoing a rare super cycle. Driven by strong HBM sales and the sharp surge in DRAM and NAND prices, the first-quarter operating profits of Samsung Electronics and SK Hynix are expected to both hit record highs, with increases close to double the previous records.

According to TrendForce data, Q1 DRAM and NAND Flash contract prices rose by 90% to 95% and 55% to 60% quarter-on-quarter, respectively. The upward trend is expected to continue in Q2.

According to sell-side forecasts, Samsung Electronics’ Q1 operating profit is estimated to reach 40 trillion to 45 trillion won, while SK Hynix is expected to be 36 trillion to 39 trillion won. Both companies set their previous single-quarter operating profit records in the fourth quarter of last year. If the forecasts are accurate, both companies will break their records again, with the new highs about double the previous peaks.

Globally, only a handful of companies reach this scale, including Nvidia, Apple, Alphabet, Microsoft, and Saudi Aramco.

Samsung Electronics’ performance forecast will be released on April 7 (Korea time), SK Hynix’s earnings call is scheduled for April 23, and Samsung’s call will be held on April 30.

Price Surge: DRAM Contract Prices Nearly Double in One Quarter

The surge in storage chip prices is the direct driver of this profit boom.

According to TrendForce data, Q1 DRAM and NAND Flash contract prices rose by 90% to 95% and 55% to 60% quarter-on-quarter. Even more noteworthy, TrendForce predicts the upward trend will continue in Q2, with DRAM contract prices expected to increase by another 58% to 63%, and NAND Flash by 70% to 75%.

This trend was already foreshadowed in Micron’s financial report released last month. Its fiscal Q2 2026 (December 2025 to February 2026) revenue reached $23.86 billion, 27% higher than the company’s own forecast of $1.87 billion; non-GAAP operating profit reached $16.5 billion, about 46% higher than expected.

Supply Constraints: New Capacity Won’t Be Available Until Late 2027 at the Earliest

Structural shortages on the supply side are the fundamental cause of the current price increases. Industry insiders expect new clean room capacity won’t be converted into effective supply until late 2027 or even 2028 at the earliest.

Against this backdrop, AI cloud service providers are actively signing five-year long-term procurement agreements with storage manufacturers to lock in supply. The supply shortage in the bulk storage market is expected to continue.

Industry insiders point out that the key long-term variables for the storage sector are whether storage efficiency technologies such as Google TurboQuant can effectively reduce server procurement volume, and whether cloud data center companies can maintain their current pace of capital expenditure.

IDC analyst Jitesh Ubrani also said, "The storage shortage will continue until 2027. Even if prices fall starting in 2028, they will not return to 2025 levels."

Downstream Pressure: Smartphone Shipments Expected to Fall by More Than 12%

The cost of soaring prices is being borne by the downstream consumer electronics industry.

IDC predicts that, dragged down by storage cost pressures, global smartphone shipments will decline by 12.9% this year, PC shipments will fall by 11.3%, and described this impact as “tsunami-level.”

Storage prices have risen so high that OEMs are proactively downgrading product specs or even completely cutting off entry-level product lines. It is also reported that display panel manufacturers have lowered their annual shipment targets for the same reason.

For major storage chip manufacturers, record profits come with the growing pressure on their customers. As the supply-demand imbalance extends downstream along the industry chain, the structural impact of this storage super cycle on the overall consumer electronics market may become a risk variable that investors need to continue monitoring.

Risk Warning and DisclaimerThe market has risks, invest with caution. This article does not constitute personal investment advice, nor does it take into account the individual investment goals, financial situations, or needs of any particular user. Users should consider whether any opinions, views, or conclusions in this article are appropriate for their specific circumstances. Investing based on this information is at your own risk. ```