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Technology Stocks : Semi Equipment Analysis
SOXX 296.26-3.9%Nov 4 4:00 PM EST
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To: Elroy who wrote (95155)10/2/2025 10:45:39 AM
From: Sam2 Recommendations

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oldbeachlvr
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?? Prices quadrupled in six months? That seems hard to believe.

If true, every major DRAM maker (all three of them!) would be significantly increasing DRAM Cap Ex by now.

First, they already are significantly increasing DRAM cap ex. Why do you think companies like AMAT, KLAC and LRCX have increased so much? Much of the added capacity is going into HBM though. And HBM requires three times as much fab space and wafers than DRAM. The Big Three had been phasing out some types of DRAM as the Chinese increased their capacity in DDR4 and DDR5 which in turn led some DRAM users to stock up on their inventory and that in turn created very tight markets in those and then Samsung in turn has said that they are delaying their shutdowns. But meanwhile, the Chinese govt told CXMT to divert all of their cap ex into HBM rather than increasing their production of other types of DRAM, the latter being the reason why the Big Three said that they were stopping production of those types of DRAM. And all of this is related to the enormous build out of AI and demand for cloud services all of which require increased memory and storage, in addition to more powerful phones, servers and computing generally.

If you are confused by that narrative, join the crowd. It gives a flavor of what has been going on in memoryville over the past few months. And it is why the stocks of the DRAM and NAND vendors have been shooting up. NAND is affected because the same folks who make DRAM also make NAND and they have been diverting wafer capacity from NAND because of what has been happening in DRAM which in turn has made the NAND vendors like SNDK shoot up as well as storage companies, both of which are also in increased demand.
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