Tech Breaking
One quick way to test whether a boom has peaked is to look at what buyers are still willing to pay. A 36-gigabyte chip of HBM3E, the high-bandwidth memory feeding artificial intelligence (AI) processors, sells for about $2,100 on the spot market, where chips trade for immediate delivery. Long-term supply agreements price the same product at roughly $370 to $510, according to reporting from the Seoul Economic Daily this week.
Memory is a cyclical business, but cycles turn when supply catches up with demand, and prices reflect that shift. However, current spot market prices—where buyers pay four to five times contract prices—suggest otherwise. SK Hynix, a key player in this market, trades around $170, about 13% below its 52-week high. The company’s second-quarter revenue surged 257% year-over-year to $58 billion, with operating profit rising 557% to a record $45 billion, indicating strong growth.
Korea’s export data further supports this narrative: while DRAM chip exports fell 13% in volume from May to July, their value increased by 19%, with unit prices jumping 37%. This trend—fewer chips shipped at higher prices—contradicts typical supply-driven peaks, where prices flatten or decline as competition returns.
SK Hynix’s own results reinforce the momentum: its operating profit grew 61% in one quarter, and market researchers predict further price increases for DRAM and NAND flash in the third quarter. However, the company faces competition from Samsung Electronics, which is ramping up HBM4 shipments, potentially reducing SK Hynix’s market share. Investors should expect volatility, but a clear peak in memory prices remains elusive.
Source: The Motley Fool
