Recently, as I’ve been researching memory, I’ve found that many people don’t understand why, among semiconductor stocks that are otherwise similar, memory concept stocks are especially volatile. In fact, the issue isn’t with the stocks themselves—it’s because this industry has a cycle that it can never escape.

Shortages, capacity expansion, oversupply, price declines, production cuts—and then shortages again. It repeats like this, over and over. Nomura’s latest forecast says that in 2026’s second quarter, DRAM and NAND prices will rise quarter over quarter by 51% and 50%, respectively. These figures are far higher than the previous estimates of 6% and 20%. See? That’s the reason memory stocks swing so aggressively.

But there’s an interesting point here. Companies at different positions in the memory industry chain face completely different risks and returns. Chip manufacturers like Nanya Technology, Winbond, and Macronix have the greatest earnings leverage, but they are also the most affected by the economic cycle. Companies making control ICs and modules like Phison and ADATA have comparatively steadier profits because they control software integration. And then there are the world’s three major giants—Micron, Samsung, and SK hynix—which dominate over 94% of the global DRAM market.

At the end of the day, if you want to profit from price spreads, you should focus on chip manufacturers. If you want something more stable, module makers are the safer choice. And if you’re investing with a long-term view and trying to capture major trends, then investing in big U.S. players is the key.

What I’ve been paying attention to recently is the current market capitalization rankings of the world’s major memory manufacturers. As of mid-April, Samsung leads by a wide margin at $897 billion, followed closely by SK hynix and Micron. Micron is especially worth noting because it is the only U.S. company with large-scale DRAM and NAND manufacturing capacity, and it is growing rapidly driven by AI applications.

On Taiwan stocks, Nanya Technology is the purest DRAM concept stock, and AI applications have already become its main growth driver. Winbond focuses on niche DRAM and NOR Flash, avoiding the price-cutting competition of general-purpose DRAM. Phison is one of the most pure-play NAND Flash targets, and the current supply gap is still close to 20%. Macronix has deep expertise in NOR Flash and ROM, with advantages in automotive and industrial fields.

Right now, DRAM concept stocks are still in an up cycle, and the shortage situation on the supply side is unlikely to ease in the short term. But the key is to judge where in the cycle we are now. You can keep an eye on three things: the trend of DRAM contract prices, when supply-chain inventory days will turn from a peak, and whether major manufacturers are showing signs of cutting capital expenditures.

The essence of memory stocks is cyclical trading—you earn money from the timing, not from the company itself. Memory stocks that fell deeply in the previous cycle have become big winners this time because of the AI-driven supply gap. Instead of looking for companies to hold forever, it’s better to learn how to judge what stage of the business cycle we’re in.