Global memory monthly sales reached a record $74.6 billion, marking a 31.7% month-on-month increase and exceeding the 10-year seasonal average by 2.8 percentage points. This surge is primarily attributed to accelerating AI-driven demand and ongoing Long-Term Agreement (LTA) negotiations. UBS and Bernstein both foresee sharp contract price increases, with UBS raising its DDR contract pricing forecast to increase 32% and 18% quarter-on-quarter in Q3 and Q4 2026, respectively, and NAND pricing expected to rise 30% and 12% over the same period. UBS projects the DRAM industry to remain structurally undersupplied through at least Q2 2028, with total memory industry revenues potentially reaching $992 billion in 2026 and $1.76 trillion in 2027. SanDisk is also a major beneficiary, particularly in NAND flash memory.
The primary public beneficiaries of this memory upcycle are Micron Technology, Samsung Electronics, and SK Hynix, as these three companies together account for the vast majority of global DRAM and NAND supply. Micron, in particular, posted strong results, with revenue of $41.5 billion against a $36 billion consensus and guided margins of 86%. The company has secured sixteen strategic supply agreements worth $22 billion in committed customer cash, often pre-paid, allowing it to charge for scarcity. This profitability at the memory makers transfers costs to downstream companies like laptop manufacturers.
While Bernstein shares the near-term bullish outlook on prices, it cautions about potential 'demand destruction' in the consumer segment and expects the pace of price increases to narrow notably into Q3 2026. However, both firms agree on the importance of LTA negotiations as a critical market dynamic. The deepest disagreement lies in the cycle duration; UBS predicts structural undersupply until at least mid-2028, anchored in AI capital expenditure, while Bernstein models memory prices to peak and normalize from 2HCY27 into CY28. UBS acknowledges that customer affordability and the sustainability of AI-related capital expenditure are key risks to its optimistic forecast.
