billion in HBM4 revenue in Q3 FY2026. More broadly, Samsung Electronics and SK Hynix are projected to announce a combined third-quarter operating profit nearing 190 trillion won, equivalent to approximately
39.0 billion, setting new quarterly earnings records for both companies. This dramatic shift is fundamentally driven by insatiable demand for HBM, with memory manufacturers struggling to keep pace, leading to unprecedented backlogs and soaring contract prices across the DRAM and NAND markets. DRAM contract prices, for instance, are forecast by KeyBanc to rise 15-20% sequentially in Q3 2026 and another 15% in Q4, while NAND prices are projected to surge 30-40% in Q3 and an additional 15% in Q4.
The mechanism
The current memory chip supercycle is not merely a demand spike but a structural transformation fueled by AI workloads. High-Bandwidth Memory, essential for AI accelerators, consumes disproportionately more wafer capacity than traditional DRAM, creating a supply displacement. Micron states it can only fulfill 50-67% of customer demand for HBM, with all 2026 supply sold out under multi-year contracts, and HBM3E and HBM4 fully booked through calendar 2027, extending into 2028. This HBM scarcity has become a primary bottleneck for NVIDIA (NVDA) accelerator shipments, cementing memory as a critical constraint in the overall AI buildout. The impact extends beyond HBM to conventional DRAM and NAND, as manufacturing capacity is reallocated to high-value AI products. Gartner has projected a 125% annual increase in DRAM prices and a 234% surge in NAND flash prices for 2026, indicating a profound market shift. The long lead times, typically 12-18 months, required to expand HBM capacity mean that new supply lags behind rapidly accelerating demand, ensuring elevated pricing and tight allocation persist through at least 2027. This shift is further reinforced by long-term agreements that lock in pricing and allocation years in advance, providing more visibility than in past cycles, as highlighted by BofA's extended super-cycle timeline to the end of 2027, with a scenario reaching 2030.
Who is exposed
The beneficiaries of this HBM-driven supercycle are the three primary memory manufacturers: Micron Technology (MU), Samsung Electronics, and SK Hynix. Micron's shares closed at
,085.02, up 0.25% today, reflecting strong investor confidence. The company's fiscal Q3 2026 non-GAAP gross margin reached 84.9%, signaling robust pricing power. Samsung and SK Hynix are also experiencing record-breaking profitability, with their combined Q3 2026 operating profits forecast to reach nearly 190 trillion won. Samsung, in particular, is aggressively expanding its HBM market share, which rose to 33% in Q2 2026 from 21% in Q1, and expects HBM4 revenue to more than triple sequentially in Q3. The company has strategically dedicated over half of its 4nm foundry capacity to producing HBM4 base dies, giving it a vertically integrated advantage. SK Hynix maintains a leading HBM market share, holding around 50%. On the demand side, AI accelerator manufacturers such as NVIDIA (NVDA), currently trading at 25.07, are directly exposed to HBM supply constraints. Additionally, Chinese chipmaker CXMT is intensifying competitive pressure in the commodity DRAM market by accelerating its capacity expansion and technology development, a factor that could influence broader market dynamics beyond high-end HBM in the longer term. Western Digital (WDC), trading at $456.81, also benefits from strong NAND pricing, which is projected to rise significantly through year-end.
Quantitative Outlook
The data unequivocally points to a prolonged period of elevated memory pricing and tight supply. Analysts anticipate DRAM prices to climb approximately 32-38% and NAND prices by 50-61% cumulatively by year-end 2026, according to KeyBanc. This is supported by projections from multiple sources, including TrendForce, which reported substantial quarter-over-quarter price increases throughout 2026. The HBM market alone is expected to grow by 58% in 2026, reaching $54.6 billion, with bit demand increasing 62% in 2027 and 69% in 2028, as estimated by SK Hynix and Citi respectively. The capacity expansion efforts by Samsung, which plans to double its HBM4 and HBM4E manufacturing by 2027, demonstrate the industry's response to this demand. However, new memory fabrication sites and expansions by SK Hynix and Samsung will not reach volume production until 2027 at the earliest. TSMC's CoWoS advanced packaging, critical for AI accelerators, is already fully booked with lead times exceeding 50 weeks for new orders, underscoring the broader supply chain tightness. Investors should closely monitor the actual ramp-up of new capacity from memory leaders and the competitive landscape, particularly the advancements and market share gains by China's CXMT, as these factors will shape the supply-demand balance beyond 2027. While the current environment signals strong performance, the long-term sustainability of such high margins will depend on the pace of capacity additions relative to persistent AI demand, especially as HBM4 and future generations like HBM5 come to market.
Tags: HBM4, Memory Supercycle, Micron, Samsung, SK Hynix, Semiconductors
