The storage “supercycle” is expected to continue, and Goldman Sachs is still optimistic about Samsung and SK Hynix

The Zhitong Finance App learned that recently, Goldman Sachs held an expert conference call on the DRAM and HBM (high bandwidth memory) markets and released the latest Korean semiconductor storage industry research report. Citing expert opinions, the research report indicated that the strong boom in the memory chip market will continue throughout 2027 and even into the first half of 2028. Based on optimistic expectations for HBM and traditional DRAM prices, Goldman Sachs reiterated its “buy” ratings for Samsung Electronics and SK Hynix (SKHY.US), with target prices of 500,000 won and 3.5 million won, respectively.

Here are five key highlights of storage market trends in the Goldman Sachs Research Report:

1. The upward trend in DRAM prices will continue until the first half of 2028

Market research firm TrendForce predicts that DRAM supply will continue to be tight throughout 2027. Despite relatively weak consumer demand, DRAM average sales price (ASP) still has room to rise further in the next few quarters, supported by strong server demand and limited production capacity increases. The current coverage of long-term agreements (LTAs) is as high as 60% to 70%, which may result in a relatively moderate price increase in 2027, but higher prices can still be negotiated for incremental demand that exceeds the promised amount. TrendForce expects DRAM prices to continue to rise until the first half of 2028.

2. HBM prices will rise sharply in 2027, and industry revenue is expected to double

TrendForce predicts that in 2027, HBM's comprehensive ASP will increase sharply by 122% year on year to reach 3.7 US dollars/Gb, which will drive the HBM industry's revenue to increase by more than 230% year on year and break through the 200 billion US dollar mark. According to TrendForce, pricing differences between different vendors and customers can be significant, with the high-end HBM4 likely to cost more than $5/GB, while the lower end is close to $3/Gb. Furthermore, due to the high cost of basic nude films, 8-layer HBM4 may be 5% to 10% more expensive per bit than 12-layer products, and next year's HBM4E price may be significantly higher than HBM4. This is in line with Goldman Sachs's previous expectations for major suppliers to grow their HBM ASP by 100% to 160% next year.

3. It will be difficult to achieve substantial capacity expansion until 2028

Despite aggressive capital expenditure plans from major manufacturers, due to limited clean room space and extended equipment delivery cycles, TrendForce believes it will be difficult to see a meaningful increase in DRAM production capacity until 2028. TrendForce predicts that each Korean supplier may increase production capacity by 80,000 to 100,000 pieces/month in 2027, but Samsung Electronics' new production capacity is expected to be allocated to HBM, and the bit growth of traditional DRAM will mainly depend on technology migration. The equipment supply situation may not begin to improve until the second half of 2027, allowing new fabs to contribute more meaningful supply from 2028, but at the same time, suppliers may also control capacity expansion plans based on demand prospects.

4. Google TPU broadens HBM demand, and HBM4 will dominate industry revenue

TrendForce pointed out that Google (GOOGL.US) is becoming an increasingly important driver of HBM demand. As the share of TPU rises, it will continue to support HBM3E's bit demand even next year, which indicates that HBM demand is expanding across generations rather than just focusing on HBM4/4E. Meanwhile, due to significant pricing premiums, Trendforce expects HBM4 to account for nearly 60% of the HBM industry's revenue next year.

5. The risk of mid-term competition among HBM suppliers in China is limited

Although Chinese manufacturers continue to invest in production capacity and technology, TrendForce believes that compared with leading suppliers, there is still a considerable gap in technology and yield between Chinese HBM suppliers, so the risk of competition in the medium term is limited. TrendForce expects that in 2027, the share of Chinese suppliers in the HBM market will be less than 2%. Among them, Fujian Jinhua (JHICC) is still focusing on HBM2E, while Changxin Storage (CXMT) is targeting HBM3/3E.