Recently, I’ve been looking into investment opportunities related to memory, and I’ve noticed that many people don’t have a deep understanding of this sector. Today, I’ll organize my observations to show everyone how to play memory stocks.

Let’s start with a core question: why do memory stocks fluctuate so wildly? Essentially, this industry has an endless cycle—shortage → expansion → oversupply → price collapse → cutback → shortage again. This cycle repeats every few years, and each time it’s quite intense.

I’ve observed that players in the memory industry can be divided into three categories. The first are those that directly produce chips, like Nanya Technology, Winbond, and Macronix. They are most affected by the economic cycle, with sharp rises and falls. The second are those controlling ICs and modules, such as Phison and Adata, which tend to have more stable profit performance. The third are global giants—Micron, Samsung, and SK Hynix. These three dominate over 94% of the global DRAM market combined and hold the pricing power.

What’s most interesting is what’s happening in the global memory market right now. According to the latest forecast from Nomura Securities, in Q2 2026, DRAM and NAND prices are expected to increase by 51% and 50% quarter-over-quarter, respectively. This is a significant upward revision from previous estimates of 6% and 20%. Why? Because the explosive growth in high-end memory demand driven by AI, especially HBM (High Bandwidth Memory).

Looking at the global rankings makes it clear. Samsung, with a market cap of $897 billion, is far ahead. SK Hynix and Micron follow closely. Samsung holds about 45.5% of the DRAM market share, while SK Hynix is the leading supplier of HBM, deeply tied to NVIDIA for many years. Micron, as the only U.S. company with large-scale DRAM and NAND manufacturing capacity, is growing rapidly thanks to AI applications.

Regarding U.S. memory stocks, Micron (MU) is the most resilient, producing both DRAM and NAND. As HBM capacity continues to expand, overall profitability is clearly recovering. SK Hynix (SKHYF) has already begun mass production of HBM3e and HBM4, directly benefiting from the surge in high-performance AI demand. Kioxia, originally Toshiba’s memory division, has seen its market cap jump from 43rd to 10th place within half a year. NAND cycles lag behind DRAM, with slower price increases, making it suitable for later-stage rotation strategies.

In Taiwan stocks, Nanya Technology (2408) is one of the few listed companies focused on DRAM manufacturing. AI applications have become a major growth driver, with customized AI memory products already contributing revenue. Winbond (2344) focuses on niche DRAM and NOR Flash, avoiding the price wars common in general-purpose DRAM. By 2026, it ranks eighth among global memory giants by market value. Phison (8299) is one of the most specialized NAND Flash companies in Taiwan. Currently, NAND supply shortages are still close to 20%, making it difficult to change the supply-demand imbalance in the short term.

My personal view is that memory stocks are fundamentally “cyclical trading” assets, not stable growth stocks. You need to assess where the industry cycle currently stands. Right now, memory prices are still rising, and the tight supply situation is unlikely to ease in the short term. Holding stocks related to manufacturing and modules still has upward momentum.

The most practical trading advice is: monitor when DRAM spot prices stabilize, watch the capex plans of leading manufacturers, and track the inventory days of global memory manufacturers. Currently, global memory manufacturers’ inventories are at historic lows, with some major companies holding only about four weeks’ worth of stock, which is a direct reason prices are prone to rise rather than fall.

If you want to trade memory stocks flexibly on a swing basis, consider using CFD platforms, such as trading Micron or other related assets. The advantage is that you can go long or short without holding actual shares, making it suitable for short-term and swing traders.

Ultimately, memory stocks profit from rhythm, not the companies themselves. The memory stocks that plunged deeply last cycle have become big winners this cycle due to the AI supply gap. If you haven’t started observing yet, you can begin by opening a demo account. Spend the next few weeks tracking DRAM contract prices, monitoring the financial reports of major manufacturers, and practicing judging where the memory cycle currently stands. Once you have a clearer grasp of the cycle, consider using small capital for real trading.