(May 13): The worsening shortage in global memory chips due to the artificial intelligence buildout is driving a widening gulf in corporate results and stock performances.
Shares of memory makers Micron Technology Inc and Samsung Electronics Co have surged to record highs on blockbuster results driven by buoyant product prices. Meanwhile, consumer product makers from HP Inc to Nintendo Co have been weighed down by profit pressures stemming from higher chip costs.
The squeeze shows how AI is reshaping the chip cycle, turning memory from a commodity input into a critical bottleneck. That has made pricing power the dividing line in global equities: suppliers are posting windfall gains while device makers face higher costs and weaker margins.
The crisis has been apparent in recent results. Memory pricing was mentioned more than 550 times in company earnings calls and quarterly reports so far this year — already more than any full year in data compiled by Bloomberg tracking global equities since 1999.
“It’s becoming increasingly obvious that the memory crunch is not only worse than feared but also becoming more prolonged than had been expected,” said Michael Brown, a senior research strategist at Pepperstone Group Ltd in London. “With AI demand continuing to surge, what we now hear from those close to the issue is that we might see the crunch continuing in some manner potentially as far as 2030.”
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Deeper pain
Problems for memory-chip consumers have been widespread. Nintendo’s stock slid Monday after it warned of high memory costs hitting margins on its game consoles, pushing its shares down more than 30% for the year to date. Smartphone and electric-vehicle maker Xiaomi Corp’s shares have slumped 20% in 2026 while copier and camera firm Canon Inc’s are down 10% on similar concerns.
More manufacturers are resorting to price increases to cushion margins, even at the risk of hurting demand for their products. Nintendo last week said it will raise prices for its Switch 2, following hikes on Microsoft Corp’s Xbox and Sony Group Corp’s PlayStation 5 in previous months. Meta Platforms Inc is boosting the prices of its virtual-reality headsets.
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“The depth of pain tracks two factors: how much of a company’s cost base is memory and how much leverage it has to secure supply or pass through prices,” said Fabien Yip, a market analyst at IG International. She sees high risk for smartphone and gaming console businesses, and medium risk for PC makers and hyperscalers.
The story is much brighter for the memory makers, who are benefiting from rising chip prices amid insatiable demand. A Bloomberg gauge of memory stocks has surged about 120% so far this year while a measure of consumer electronics shares is up around 3%.
Samsung recently joined the elite club of firms with a market value of over US$1 trillion after announcing a 48-fold jump in quarterly chip business profits last month. Its fellow high-bandwidth memory makers Micron and SK Hynix Inc have also been extending stock-price gains following strong reports.
“Even beyond the first‑quarter earnings season, momentum in memory remains exceptionally strong,” said Simon Woo, head of Korean research and Asia Pacific technology research coordinator at BofA Global Research. “April data show Taiwan memory-related sales accelerating sharply while Korea’s semiconductor exports were still up more than 100% year on year.”
Broadening benefits
The pool of beneficiaries is growing as AI moves beyond the training phase to more mainstream applications. Investors are also now snapping up shares of makers of less-advanced DRAM chips as well as various flash and hard-disc drive products.
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SanDisk Corp has extended its gain for the year to more than 500% after higher NAND prices drove stronger-than-expected earnings. Shares of its partner Kioxia Holdings Corp are up more than 360% on the year, ahead of its report due Friday.
The ongoing AI rally has raised some talk of a bubble, especially amid ongoing economic uncertainty caused by the Iran war. Chip stocks tumbled in the US on Tuesday as rapid recent gains spurred concerns of overheating.
Memory bulls argue that AI has spawned a “supercycle” for chip demand, well outside the industry’s traditional boom-and-bust pattern. Contract prices for NAND chips have surged more than 600% since the end of September while those for DRAM chips are up nearly 400%, and analysts see the trend continuing.
“Pricing upside should persist as AI-led demand continues to outstrip supply, inventory is tight and HBM supply is locked up under multi-quarter price and volume agreements,” JPMorgan Chase & Co strategists including Mixo Das wrote in a note dated Sunday. Prices and sales volumes may continue to rise in 2027-2028, they said.
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