Storage chips just collateral damage? DRAM price hike expectations violently raised again

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On Monday, the global storage chip sector was hit hard by a surge in market pessimism. Influenced by expectations of tightening overseas liquidity and the first decline in DRAM spot prices in several months, shares of Korean memory giants plunged, while the A-share storage sector also performed weakly under pressure from negative sentiment. The market's worries stem mainly from the panic that “declining spot prices mean the cycle has peaked.”

However, in its latest report released on February 2, Goldman Sachs forcefully refuted this pessimistic outlook. The report noted that although volatility has appeared in the spot market, DRAM contract prices have not fallen; in fact, expectations for further sharp rises are growing. Goldman has significantly raised its forecast for DRAM price increases in the first quarter of 2026, predicting a quarter-on-quarter surge of 90-95%, far exceeding previous market and internal expectations.

Against this backdrop, the current market declines are seen as a misinterpretation of fundamentals. There is a huge price gap between spot and futures (contract) prices; currently, the high-priced spot market is showing “prices but no market,” while the contract market—which really determines corporate profits—remains in a strong upward channel. Goldman Sachs reiterated its “Buy” rating for Samsung (SEC) and SK Hynix, believing bearish news has distorted tech stock performance and that this is instead a case of “unjustified sell-off” for the memory chip sector.

DRAM Contract Price Forecast Surges: Q1 May Jump 95%

Goldman Sachs analyst Giuni Lee’s team pointed out in the report that contract pricing forecasts for DRAM in all major application fields for Q1 2026 have been notably raised. Particularly for mainstream DRAM, overall pricing is expected to grow 90-95% quarter-on-quarter in Q1 2026 after a 45-50% jump in Q4 2025. This forecast is well above Goldman's previous Samsung and SK Hynix forecast of 77-82% QoQ growth and above Wall Street consensus.

For mobile NAND (eMMC/UFS), contract prices in the first quarter of 2026 are also expected to see a 55-65% QoQ rise, in line with Goldman’s prior forecast of a 45-70% increase for overall NAND. Although consumer electronics demand has softened in the off-season, robust enterprise SSD (eSSD) and AI-driven storage demand has limited supply allocated to smartphone and PC clients, continuing to drive up prices in these subsectors.

PC & Server DRAM: Supply Shortages Push Premiums Higher

In specific sectors, price hikes for PC DRAM and server DRAM are especially vigorous. TrendForce has raised its Q1 2026 PC DRAM contract price forecast to a 105-110% QoQ jump, while maintaining a 20-25% rise for Q2. This is well above Goldman's prior estimate of 80-90%, suggesting more upside in the market.

Specifically, January saw DDR4 8GB module prices rise 83% quarter-on-quarter to $85, and DDR5 8GB modules up 90% to $75. With some price negotiations finishing only in January and ongoing supply constraints, prices could climb further for the rest of this quarter.

The server segment is also facing shortages. Although suppliers have shifted some capacity from PCs and smartphones to servers, strong demand from North American and Chinese cloud service providers (CSPs) means supply remains tight and suppliers retain strong pricing power. TrendForce raised its Q1 2026 server DRAM contract price forecast to 88-93% QoQ growth, slightly above Goldman’s previous 75-80% forecast. Notably, the premium of DDR5 over DDR4 is narrowing, with January’s premium between DDR5 64GB modules and equivalent DDR4 modules dropped to 9%.

Mobile DRAM: AI Demand Squeezes Capacity

The mobile DRAM market is also affected. TrendForce sharply raised its Q1 2026 price forecast for LPDDR5X from QoQ growth of 45-50% to 88-93%.

The logic behind this aggressive price outlook is capacity squeeze: Strong demand for memory chips from server customers further widens supply-demand gaps in other applications. As suppliers prioritize the more profitable server and AI-related demand, mobile DRAM supply is becoming increasingly tight, sharply pushing up prices. This newest forecast also far exceeds Goldman’s previous Samsung and Hynix estimates of a 75-80% QoQ increase in this segment.

Valuation and Price Targets: Buy Ratings Reaffirmed

Based on strong price increase expectations, Goldman reaffirmed its optimism for Korea’s two memory giants. For Samsung, Goldman assigned a KRW 205,000 price target for common stock based on its 2026 EV/EBITDA valuation model; main downside risks include worsened memory supply-demand and contraction in smartphone profit margins.

For SK Hynix, Goldman gave a 12-month price target of KRW 1,200,000. Analysts noted that due to Hynix’s significant growth in HBM (high bandwidth memory) revenue, it merits a 30% “AI premium” versus Samsung. This target price is based on a 2.8x target P/B ratio, referencing peak valuations from the last major pricing upcycle (2009-2010).

In summary, while short-term spot price volatility has stoked investor panic, data from Goldman and TrendForce suggest contract prices in the memory sector are in the midst of their strongest upcycle in years. Concerns about a “cycle top” may just be a case of unjustified sell-off stemming from information asymmetry.

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