Recently, I’ve been looking into the memory sector and found that many people still don’t understand why memory stocks are so volatile. Today, I want to share my observations.

Actually, the concept stocks related to memory seem complicated, but if broken down, there are only three roles. The first type directly makes chips, like Nanya Technology, Winbond, and Macronix. They are at the top of the supply chain, and when market prices rise, their profit margins expand the most, but they are also most affected by economic cycles, with sharp rises and falls. The second type controls chip read/write functions or makes modules, like Phison and Adata. Their profit performance is usually more stable because they have a moat through software integration. The third type is the global giants—Micron, Samsung, and SK Hynix—who dominate over 94% of the global DRAM market. They are the real players with pricing power.

Why is it so hard to predict memory stocks? The core reason is that it’s an endless cycle: shortage → expansion → oversupply → price collapse → cutback → shortage again. Nomura Securities’ latest forecast predicts that by Q2 2026, DRAM and NAND prices will increase by 51% and 50% quarter-over-quarter, respectively, significantly upgrading previous estimates of 6% and 20%. That’s why some people can make big money in this cycle, while others get trapped.

Globally, Samsung Electronics leads with a market cap of $897 billion, holding about 45.5% of the DRAM market share, and is accelerating in the HBM (High Bandwidth Memory) field. SK Hynix ranks second in market value, and they are a true leader in high-end AI memory, closely tied to NVIDIA. Micron is the only U.S. manufacturer with large-scale DRAM and NAND production capacity. As HBM capacity expands, overall profits are recovering. Kioxia, originally Toshiba’s memory division, has risen from the 43rd to the 10th largest in just half a year, a growth rate that’s hard to ignore.

On the Taiwan stock market, I’m particularly focused on Nanya Technology. They are one of the few Taiwanese listed companies dedicated to DRAM manufacturing. AI applications have become a major growth driver, with customized AI memory products already contributing to revenue. Winbond takes a niche approach, focusing on DRAM and NOR Flash, with deployments in consumer electronics, industrial, and automotive fields, avoiding the price wars of general-purpose DRAM, resulting in relatively less profit volatility. Phison is the purest NAND Flash company; currently, the NAND supply gap is close to 20%, and AI inference is driving nearly unlimited data storage demand.

Regarding the emerging concept of DDR5, Runci Technology specializes in DDR5 and HBM memory buffer chips. As DDR5 penetration rapidly increases, they hold a quasi-monopoly position in this field, with clear growth momentum. Adata, as one of the top three global memory module manufacturers, is also quickly advancing its DDR5 product line.

The key is how to judge whether now is a good time. I usually focus on three things: first, whether spot prices for DRAM have stopped falling, as this is the most important signal of an industry turnaround. Second, whether leading manufacturers have started to cut production. Although Samsung, SK Hynix, and Micron are expected to see explosive growth in 2026, they are all slowing capex expansion to prevent oversupply in 2027. Third, inventory days. Currently, global memory manufacturers’ inventories are at historic lows, with some major companies holding only about four weeks of stock, which explains why prices are easy to rise but hard to fall.

Honestly, memory stocks are not stable growth stocks but purely cyclical trading assets. Your gains are fundamentally based on your judgment of the economic cycle rhythm. The memory stocks that plunged deeply in the last cycle have become big dark horses this round because of the AI supply gap. At this position, memory prices are still rising, and the tight supply situation is unlikely to ease in the short term. Related manufacturing and module stocks still have upward momentum.