Citrini Analyst: AI Era May Change Memory Cycle Logic; Chip Stock Decline Doesn't Necessarily Mean Industry Collapse

Odaily Planet Daily News Citrini analyst Jukan published an analysis pointing out that the recent decline in memory chip stocks is not only due to leveraged fund liquidations, but the market may also be pricing in the pressure from future supply expansion in advance. Even if the global memory shortage persists until 2027, most research institutions and industry observers still expect supply-demand tightness to begin easing in 2028. As memory manufacturers like Samsung Electronics and SK Hynix announce large-scale wafer fab expansion plans, the market may have already started to reflect the impact of new capacity coming online after 2028.

There is a common rule in the traditional memory industry: memory stock prices typically peak about two quarters ahead of memory prices. However, in the new cycle driven by AI, the market might price in future supply-demand changes much earlier, perhaps three or even four quarters in advance. The AI era could bring new changes; the traditional logic that "price drops lead to revenue decline" may not fully apply to the AI infrastructure market.

Jukan stated that the key difference is that in the AI era, "demand growth triggered by price drops" could buffer the downside impact of the memory price cycle. If this logic holds, the earnings volatility of memory companies in the future may be lower than in past cycles, potentially supporting higher valuation levels.