Author: Rita
The super cycle in memory chips continues. In its global memory technology weekly report released on August 7, BofA Securities raised its forecast for global DRAM industry sales to $573 billion in 2026, further increasing to $847 billion in 2027 and reaching $917 billion in 2028. Although SK Hynix's Q2 DRAM ASP increased only 30% quarter-on-quarter, lower than peers' gains of 45% to 70%, a rapid rebound of 25% is expected in Q3, with HBM4 shipments also becoming more significant. NAND spot prices saw an unexpectedly strong rebound this week, with 512Gb to 1Tb products rising 5% to 6%, and 256Gb products surging over 10%, far exceeding seasonal patterns. BofA believes Samsung is poised to announce returning a significant amount of cash to shareholders through buybacks and a special dividend, expecting the special dividend to exceed KRW 30 trillion and buybacks to exceed KRW 40 trillion.
Storage Super Cycle Continues to 2027, ASP to Be Revised Up Again in Q4
BofA updated its global memory industry forecast model. Global DRAM industry sales are projected to reach $573 billion in 2026, a year-on-year increase of 328%, $847 billion in 2027, growing 48%, and slightly declining to $917 billion in 2028, down about 8%. NAND industry sales are forecasted to reach $357.5 billion in 2026, up 341% year-on-year, $467.5 billion in 2027, growing 31%, and falling about 14% in 2028.
Regarding the price path, BofA expects the industry's average DRAM ASP to increase 8% quarter-on-quarter in Q4, with NAND up 3%, followed by stabilization or a mild correction in 2027. However, the average ASP for the full year 2027 will still be higher than in 2026 due to a lower base in the first half. The ASP decline in 2028 will be a mild correction rather than a hard landing, with the industry maintaining relatively high profit margins. DRAM bit growth is estimated at 25% in 2026, 19% in 2027, and 19% in 2028; NAND bit growth is estimated at 20%, 19%, and 19%, respectively.
HBM demand is the core supporting the super cycle. BofA expects the HBM market size to reach $77.4 billion in 2026, a year-on-year increase of 124%, further rising to $152.8 billion in 2027, up 98%. HBM's share of total DRAM shipments will increase from 8.5% in 2025 to 11.7% in 2026 and reach 14.1% in 2027. HBM ASP is forecasted to rise 30% to $14.6 per GB in 2026 and increase 38% to $20.2 in 2027. BofA expects SK Hynix to maintain its lead in HBM shipments, but Samsung's share in HBM wafer capacity is expected to catch up or even surpass SK Hynix's from 2026 to 2027.
NAND Spot Prices Unexpectedly Strong Rebound, DRAM Also Rises
This week's NAND spot price performance exceeded expectations. 512Gb to 1Tb products rose 5% to 6%, while 256Gb products surged over 10%. BofA attributes this to secondary and tertiary OEMs preparing inventory for new models ahead of the peak season in September and Q4. DRAM spot prices also rebounded further, up 1% to 2% week-on-week, translating to quarterly gains of about 20% to 40%. Overall, spot price performance is better than seasonal norms, with supply for traditional DRAM and NAND remaining tight.
Nanya Technology's July revenue reached NT$44 billion, up 49% month-on-month and 720% year-on-year. South Korea's semiconductor exports in July amounted to $42 billion, down 9% month-on-month but still showing strong year-on-year growth of 179%. BofA's memory indicator read 183 in June, still near historical highs, far above the mid-cycle (100) and previous cycle (130) levels.
Samsung Initiates Large-Scale Capital Return, HBM Capacity Continues Expansion
Samsung Electronics is expected to announce more details on buybacks and cash dividends in the near term. According to the CFO's statement on the July 30 earnings call, Samsung will use 50% of its free cash flow from 2024 to 2026 (after deducting the annual KRW 10 trillion dividend already paid) for shareholder returns. BofA believes the execution plan may include: distributing a special dividend exceeding KRW 30 trillion in Q3 or Q4, initiating a share buyback exceeding KRW 40 trillion in the first half of 2027, and paying a year-end dividend of around KRW 30 trillion in April 2027. Additionally, Samsung will require over KRW 30 trillion in treasury stock for special employee incentives. BofA expects SK Hynix will also allocate 50% of its free cash flow for shareholder returns, with buyback efforts potentially stronger than cash dividends.
Regarding HBM capacity, BofA forecasts HBM wafer capacity will reach 476,000 wafers per month in 2026 (accounting for 22.6% of total DRAM capacity) and 741,000 wafers per month in 2027 (accounting for 26.6%). Samsung's share of HBM wafer capacity is expected to rise from 37% in 2025 to 39% in 2027, approaching SK Hynix's 40%. HBM4 and HBM4e will be the main products from 2026 to 2027, with HBM5 and above products gradually penetrating from 2027 onward.
The storage super cycle is shifting from price-driven to volume-and-price dual-driven. The slight decline in industry ASP in 2028 should not be seen as the end of the cycle. The continuous ramp-up of HBM and the structural demand from AI servers are reshaping the memory industry's profit model. Samsung's large-scale buyback and special dividend will provide valuation support. BofA's memory indicator remaining at historical highs indicates industry momentum has not subsided. The tight supply-demand balance for DRAM and NAND is unlikely to reverse before 2027, and the endpoint of the super cycle may be further away than market expectations.
Disclaimer
This article is Chaoxiang Research's compilation and interpretation of a third-party brokerage research report (BofA Securities, August 7, 2026), combined with publicly available market information. The ratings, target prices, earnings forecasts, and related judgments cited in the article represent the views of the brokerage analyst, reflecting only the stance of their affiliated institution. They do not represent the views of Chaoxiang Research and do not constitute any investment advice.
The market carries risks, and decisions must be made independently. This article should not serve as a basis for trading any securities.
