Citrini Analyst: The AI Era May Change the Storage Cycle Logic; A Drop in Chip Stocks Does Not Necessarily Imply Industry Collapse

Odaily Odaily Planet Daily reported that Citrini analyst Jukan pointed out in an analysis that besides the impact of leveraged fund liquidations, the recent decline in memory chip stocks may also be driven by the market pricing in the pressure from future supply expansion. Even if the global memory shortage persists until 2027, most research institutions and industry observers still expect supply-demand tension to begin easing in 2028. As memory manufacturers such as Samsung Electronics and SK Hynix announce massive wafer fab expansion plans, the market may have already started to price in 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 chip prices. However, in the new cycle driven by AI, the market may price in future supply-demand changes much earlier, for example, three or even four quarters in advance. The AI era could bring about new changes; the traditional logic in the memory cycle, where "price drops lead to revenue decline," may not fully apply to the AI infrastructure market.

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