A supply crunch and rising prices in the memory chip market are expected to continue through 2027, according to a leading semiconductor industry executive, underscoring concerns that the AI-driven shortage may last longer than anticipated, as mentioned on CNBC.
AI Boom Fuels Unprecedented Demand
Memory chips — crucial for smartphones, laptops and other consumer electronics — are a critical component of artificial intelligence data centers and servers. Demand is heavily strong for high-bandwidth memory, which is widely used in AI workloads. With tens of billions of dollars being invested in data center infrastructure, demand for memory chips has surged.
Limited Supply to Persist Until 2027
Sassine Ghazi, CEO of semiconductor design software firm Synopsys, told CNBC that the chip “crunch” will extend through 2026 and 2027. He noted that maximum memory output from leading suppliers is being directed toward AI infrastructure, leaving other markets undersupplied.
Samsung, SK Hynix and Micron dominate the global memory market, but even as these companies plan capacity expansions, new manufacturing facilities typically take at least two years to come online.
A New “Super Cycle” for Memory Prices
Historically, memory prices have followed cyclical patterns of shortage and oversupply. However, analysts now describe the current environment as a “super cycle,” driven by structural demand from AI, as quoted on the above-mentioned CNBC article. No wonder memory prices are climbing due to strong demand and constrained supply.
How to Play The Trend With ETFs?
Micron-Heavy ETFs: The company is rapidly expanding its DRAM, NAND and HBM production. The stock has a solid presence in ETFs like First Trust Nasdaq Semiconductor ETF FTXL, Invesco AI and Next Gen Software ETF IGPT and iShares Semiconductor ETF SOXX.
South Korea ETFs: SK Hynix plays a pivotal role in the memory market – especially high-bandwidth memory used in AI systems. Samsung is also an important player, actively developing next-generation HBM and NAND products. iShares MSCI South Korea ETF EWY invests about 27% in Samsung and 19% in SK HYNIX.
SanDisk-Seagate- Western Digital-Heavy ETFs: Other key names in memory-related products are SanDisk (SNDK), Seagate (STX) and Western Digital (WDC). Each of these three stocks has a decent exposure to the Fidelity Cloud Computing ETF FCLD.
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iShares Semiconductor ETF (SOXX): ETF Research Reports iShares MSCI South Korea ETF (EWY): ETF Research Reports First Trust NASDAQ Semiconductor ETF (FTXL): ETF Research Reports Fidelity Cloud Computing ETF (FCLD): ETF Research Reports Invesco AI and Next Gen Software ETF (IGPT): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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