DRAM spot prices soar by 600%: Memory manufacturers' stock prices hit record highs, while smartphone and PC giants' stocks suffer heavy losses

DRAM spot prices have soared over 600% in the past few months, pushing the narrative of a storage chip shortage into a “super cycle” and creating a rare divergence of winners and losers in the stock market: memory manufacturers' share prices soared, while consumer electronics, mobile phone, and PC industry chain companies faced profit margin pressure.

According to Bloomberg data, the global consumer electronics manufacturers index has dropped 12% since the end of September, while the memory manufacturers’ stock index, including Samsung, has risen more than 160% over the same period.

The market is currently focused on how long the supply shortage will last. Fidelity International fund manager Vivian Pai said that the market is mostly pricing in scenarios where “disruptions will normalize within one to two quarters,” but she believes the industry tightness may persist, possibly throughout this year.

Funds are repricing around the ability to pass on costs and ensure supply. Qualcomm shares fell over 8% last Thursday after the smartphone processor giant warned that memory constraints would limit phone production. Nintendo’s shares saw their biggest single-day drop in 18 months the next day, after it warned that shortages would put pressure on profit margins.

Terminal Manufacturers Fall Into Profit Dilemma

Issues such as storage chip shortages limiting output and rising product prices eroding profits have been frequently mentioned in corporate financial reports and conference calls.

In addition to game console maker Nintendo and smartphone chip giant Qualcomm, terminal device manufacturers in various industries are feeling the strain. Shares of major PC brands and Apple suppliers have slid due to concerns over profitability. PC peripheral makers like Logitech face a bleak outlook as higher chip prices suppress PC demand.

Charu Chanana, Chief Investment Strategist at Saxo, commented: "Memory chip prices have truly shifted from a behind-the-scenes topic to a headline this earnings season. The market broadly understands that memory prices are rising and supply is tight—this is no longer new information, so I think it is priced in. However, the timeline of supply tightness has now come into question."

Memory Chip Manufacturers' Stock Prices Soar

In sharp contrast to the troubles faced by terminal manufacturers, memory chip makers have emerged as standout winners among tech stocks.

SK Hynix, a key HBM supplier to NVIDIA, has seen its share price surge over 150% since late September last year. Makers of more traditional chips have seen even more stunning gains: Japan’s Kioxia Holdings and Taiwan’s Nanya Technology are both up about 280%, while SanDisk has climbed over 400% in the same period.

According to Bloomberg data, as of February 10, 2025, both DRAM and NAND prices have surged since last autumn. DRAM spot prices have surged over 600% in recent months. Although demand for terminal products such as smartphones and cars remains sluggish, AI is creating new demand for NAND chips and other storage products.

Memory Chip Supply Tightness May Last Longer Than Expected

The biggest question for investors now is: How long will this "super cycle" last, and how much of current stock prices already reflect expectations?

Jian Shi Cortesi, a fund manager at GAM Investment Management in Zurich, said she has been a long-term holder of memory chip stocks. "Historically, memory chip cycles typically last 3-4 years," she said. "The current cycle has already exceeded past cycles in both length and magnitude, and we have not seen any signs of a slowdown in demand momentum."

Fidelity’s Pai pointed out that current valuations largely expect supply disruptions to normalize within one to two quarters, but the reality may be more severe. She thinks industry tightness may last until the end of this year.

Meanwhile, the market is also watching whether terminal makers can manage the supply crisis by locking in supply, raising prices for consumers, or redesigning products to use fewer memory chips. Judging by current share price performance, investors’ views on different companies’ abilities to cope have already diverged significantly.

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