Written by: Rita
The super cycle for memory chips continues. In its Global Memory Technology Weekly Report issued on August 7, Bank of America 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 rose only 30% quarter-over-quarter, below the industry-wide range of 45% to 70%, a rapid 25% rebound is expected in Q3, along with significantly higher HBM4 shipments. NAND spot prices unexpectedly strengthened this week, with 512Gb to 1Tb products rising 5% to 6% and 256Gb products surging over 10%, far exceeding seasonal trends. Bank of America believes Samsung is set to announce a substantial cash return to shareholders through share repurchases and a special dividend, with the special dividend expected to exceed KRW 30 trillion and repurchases surpassing KRW 40 trillion.
The storage supercycle will continue through 2027, and ASPs in the fourth quarter will be revised upward again.
Bank of America has updated its global storage industry forecast model. Global DRAM industry sales are projected to reach $573 billion in 2026, a 328% year-over-year increase, $847 billion in 2027, a 48% increase, and slightly decline to $917 billion in 2028, a decrease of approximately 8%. NAND industry sales are forecasted to reach $357.5 billion in 2026, a 341% year-over-year increase, $467.5 billion in 2027, a 31% increase, and decline by approximately 14% in 2028.
Regarding price trends, Bank of America expects the industry average DRAM ASP to rise 8% quarter-over-quarter in Q4 and NAND to increase 3%, followed by stability or mild corrections in 2027. However, the full-year 2027 ASP average will still exceed that of 2026 due to lower baselines in the first half. The ASP decline in 2028 will represent a mild correction rather than a hard landing, with the industry maintaining high profit margins. DRAM bit growth is forecasted at 25% in 2026, 19% in 2027, and 19% in 2028; NAND bit growth is projected at 20%, 19%, and 19%, respectively.
HBM demand is the core driver of the supercycle. Bank of America expects the HBM market to reach $77.4 billion in 2026, a 124% year-over-year increase, and further rise to $152.8 billion in 2027, up 98%. The share of HBM in total DRAM shipments is projected to increase from 8.5% in 2025 to 11.7% in 2026, and reach 14.1% in 2027. The HBM ASP is expected to rise by 30% in 2026 to $14.6 per GB, and by 38% in 2027 to $20.2. Bank of America anticipates SK Hynix will maintain its lead in HBM shipment volume, while Samsung is expected to match or even surpass SK Hynix in HBM wafer capacity share between 2026 and 2027.
NAND spot prices unexpectedly rebounded strongly, with DRAM rising in tandem.
This week, NAND spot prices outperformed expectations, with 512Gb to 1Tb products rising 5% to 6% and 256Gb products increasing by over 10%. Bank of America attributes this to secondary and tertiary OEMs stocking up on new models in preparation for the September and fourth-quarter peak season. DRAM spot prices also rebounded further, rising 1% to 2% quarter-over-quarter, corresponding to a quarterly increase of approximately 20% to 40%. Overall, spot prices have surpassed seasonal trends, with traditional DRAM and NAND supplies remaining tight.
Nanya Technology's July revenue reached NT$44 billion, up 49% month-over-month and 720% year-over-year. South Korea's semiconductor exports in July amounted to $42 billion, down 9% month-over-month but still strongly up 179% year-over-year. The Bank of America memory index for June stood at 183, remaining near historical highs and significantly above the mid-cycle level (100) and the previous cycle level (130).
Samsung launches large-scale capital return, with HBM capacity continuing to expand
Samsung Electronics is expected to announce further details on its share buyback and cash dividend plans soon. According to the CFO’s remarks during the July 30 earnings call, Samsung plans to allocate 50% of its free cash flow from 2024 to 2026—after deducting the annual dividend payment of 10 trillion KRW—for shareholder returns. Bank of America believes the implementation may include: a special dividend exceeding 30 trillion KRW in Q3 or Q4, a share repurchase program exceeding 40 trillion KRW in the first half of 2027, and a year-end dividend of approximately 30 trillion KRW paid in April 2027. Additionally, Samsung will require over 30 trillion KRW in treasury shares for employee special bonuses. Bank of America also expects SK Hynix to allocate 50% of its free cash flow toward shareholder returns, with buybacks likely to outweigh cash dividends.
In terms of HBM production capacity, Bank of America expects HBM wafer capacity to 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 projected to rise from 37% in 2025 to 39% in 2027, nearing SK Hynix’s 40%. HBM4 and HBM4e will be the primary products from 2026 to 2027, while HBM5 and higher-generation products will begin gradually entering the market starting in 2027.
The storage supercycle is transitioning from price-driven to dual-driven by both price and volume. A slight decline in industry ASPs by 2028 should not be viewed as the end of the cycle; sustained volume growth in HBM and structural demand from AI servers are reshaping the storage industry’s profit model. Samsung’s large-scale share buybacks and special dividends provide valuation support, while Bank of America’s storage indicators remain at historical highs, signaling that industry momentum has not yet faded. The tight supply-demand balance for DRAM and NAND is unlikely to reverse before 2027, suggesting the supercycle’s end may be further away than the market expects.
Disclaimer
This article is a compilation and interpretation by Chaoxiang Research of a third-party brokerage research report (Bank of America Securities, August 7, 2026), combined with publicly available market information. The ratings, price targets, earnings forecasts, and related judgments cited herein reflect the views of the brokerage’s analysts and represent the position of their respective institution only; they do not reflect the views of Chaoxiang Research nor constitute any investment advice.
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