JPMorgan predicts that memory chips are entering the longest boom cycle in history: leading manufacturers' market capitalization will approach one trillion US dollars this year and surge to 1.5 trillion by 2027, with an increase of over 50%. The growing demand for HBM continues to encroach on traditional DRAM production capacity, with AI inference consuming three times the memory required for training. This supply-demand gap will persist until 2027. A forecast indicates that DRAM prices will soar by 53% in the fiscal year 2026, and robust growth in the enterprise market will fully offset pressures from the consumer segment.
JPMorgan noted in its latest research report that the total market capitalization of leading memory chip manufacturers has approached USD 1 trillion. Based on historical valuation metrics, this figure is projected to surge to USD 1.5 trillion by 2027, implying an upside potential of over 50% for leading firms.
According to the Storm Chaser Trading Platform, on December 14, JPMorgan stated in its latest report that the current cycle will be the longest and strongest upcycle for memory in history.
Investors are generally concerned that new capacity in 2027 could lead to an oversupply of DRAM. However, JPMorgan's data model suggests such concerns are unwarranted—capacity constraints from HBM and structural demand driven by AI inference (which consumes three times more memory than training) will result in DRAM bit supply growth continuing to lag behind demand growth over the next two years.
The market is experiencing a 'dual-track' pricing mechanism. Strong B2B (enterprise/AI) demand supports high price levels, while B2C (consumer) faces cyclical pressures. Overall, however, upward demand from the server segment will fully offset downside risks on the consumer side.
Valuation Reset: March Towards USD 1.5 Trillion
JPMorgan addressed a key concern among investors in its report: After storage stocks surged significantly over the past three months, nearing the USD 1 trillion market cap threshold, what’s next?
JPMorgan's answer was unequivocal: continue to go long.
Based on the 'market capitalization/total addressable market (TAM)' valuation framework, JPMorgan forecasts that the memory market size will reach approximately USD 420 billion by 2027. Using the median price-to-sales (P/S) ratio of 3.5x from the cycles in 2018 and 2021, the combined market capitalization of leading storage and memory manufacturers is expected to approach USD 1.5 trillion by 2027.
This implies that, from current levels, leading players still have over 50% upside potential.
Supply-Demand Dynamics: Shortages to Persist Until 2027
The largest bearish argument in the current market is that the launch of new wafer fabs in 2027 and accelerated technology migration will lead to an oversupply of DRAM.
JPMorgan refuted this view through a bottom-up 'capacity-bit' analysis model:
Persistent gap: Although the supply-demand gap in 2027 may narrow from 5% in 2026 to 3%, it will still remain in a state of shortage.
Capacity squeeze: Strong CSP (cloud service provider) demand forces manufacturers to allocate more capacity to HBM. The proportion of HBM in total DRAM capacity will surge from 19% in 2025 to 28% in 2027.
Supply constraints: Conventional DRAM capacity in 2026 is actually expected to decline year-on-year, and even with new capacities such as Samsung's P4 and SK Hynix's M15X coming online in 2027, DRAM bit shipment growth will be limited to below 20% due to natural capacity losses caused by cleanroom space limitations and increased process steps.
The Tale of Two Pricing Powers: B2B Feast vs. B2C Cycles
This is a 'storage hunger game.'
CSPs and specific Tier 2/3 consumer electronics brands are aggressively competing for resources, triggering a recent sharp increase in memory prices. JPMorgan predicts that from the second half of 2026 to the first half of 2027, the market will witness noticeable price bifurcation:
B2B segment (AI-driven): Prices will remain firm, supported by AI inference demand.
B2C segment (consumer-grade): Cyclical downward pricing pressure will occur due to customer resistance to high prices.
Key Data Forecast:
Fiscal Year 2026 (FY26E): JPMorgan’s model indicates that the average selling price (ASP) of DRAM is expected to surge by 53%, while NAND ASP will rise by approximately 30%.
Fiscal Year 2027 (FY27E): Despite an extended period of high prices, DRAM ASP is projected to increase slightly by 1%, whereas NAND ASP may experience a modest decline of 6%.
AI Drivers: Structural Opportunities for HBM and eSSD
HBM (High Bandwidth Memory): Riding the wave of GPU vs. ASIC competition. Positive feedback on Google Gemini 3.0 has sparked a debate over GPU versus ASIC pathways, but this represents a dual benefit for HBM demand.
Specification upgrades: Google's next-generation 2nm TPU may adopt HBM4, and the quadrupling of capacity brought by Rubin Pro GPUs will continue to strain the supply chain.
Persistent Shortages: JPMorgan forecasts that the HBM supply-demand shortfall (approximately 8%-12%) will persist through 2027 and could extend into 2028.
SSD (Solid-State Drives): A key component in inference applications. The rise of AI inference is driving the expansion of the enterprise SSD (eSSD) market. AI servers require three times the SSD capacity compared to standard servers.
Due to cautious capital expenditure guidance from HDD (Hard Disk Drive) manufacturers in 2026, JPMorgan anticipates that eSSDs will enjoy significant demand tailwinds over the next six months, propelling NAND price increases of 27% in FY26.
Capital Expenditure: Growth with Restraint
Despite a series of capacity expansion announcements by memory manufacturers, JPMorgan believes the actual bit supply growth will be offset by physical migration challenges.
Equipment spending takes the lead: Growth in wafer fab equipment (WFE) for memory is expected to significantly outpace overall capital expenditure growth (DRAM WFE projected to grow 19% in 2026 and 26% in 2027).
Intensity remains manageable: The implied capital intensity for both DRAM (below 30%) and NAND (below 20%) will remain below the average levels of the past five years, indicating continued significant discipline on the supply side.
Editor/jayden
