AI Business
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Memory Chips Surge in Value Amid AI Demand, Experts Warn of Potential Market Correction
May 11, 2026
AI Summary
Memory chips have seen a significant price increase due to rising demand from the AI sector, with major companies like Micron experiencing substantial stock gains. However, experts caution that this boom may follow historical patterns leading to a market correction as supply increases and prices stabilize.
- Memory chips, particularly DRAM and high-bandwidth memory (HBM), have become crucial for AI applications, leading to a surge in their market value.
- The Philadelphia Stock Exchange Semiconductor Index rose 60% in six weeks, with Micron's stock jumping 38% in one week, marking its best performance since 2008.
- Harvard Business School professor Willy Shih warns that the current memory boom resembles past cycles, suggesting that unsustainable price increases will eventually lead to a market correction.
- DRAM prices are projected to rise 58%-63% in Q2, the highest increase in a decade, with Samsung reporting a 90% price hike in the first quarter.
- The shift in memory demand towards AI servers has led to a reallocation of production capacity, impacting consumer electronics and driving up prices for products like smartphones and gaming consoles.
- Analysts predict a 31% decline in global smartphone shipments over the next year, with companies like Apple and Sony already raising prices due to increased memory costs.
- Historical trends indicate that after periods of high prices, memory capacity typically increases, leading to a crash in prices, a cycle that Shih believes will repeat despite current market optimism.
- New memory fabrication facilities from major companies are not expected to be operational until late 2027 or 2028, raising concerns about timing in the current cycle.
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