Global investment bank (IB) Morgan Stanley said that, powered by demand for artificial intelligence (AI), the memory chip industry could keep its upward momentum through the first half of 2026.
Morgan Stanley fanned talk of a semiconductor winter a year ago with its reports "Memory–Winter Always Laughs Last" and "Winter looms," but said "A Warm Winter This Year" may be possible.
According to the financial investment industry on the 22nd, Morgan Stanley said this in a report titled "Memory Supercycle – Rising AI Tide Lifting All Boats."
Morgan Stanley assessed that a memory chip shortage is emerging worldwide. The outlook that DRAM prices could undergo a correction by year-end has disappeared, and, fueled by a surge in orders for cloud servers, the average selling price in the fourth quarter of this year (October–December) has risen about 9% from current levels, Morgan Stanley said.
Morgan Stanley pointed to five major changes related to the chip cycle. ▲ Recent orders for 2026-delivery "enterprise solid-state drives (eSSD)" are on par with this year's annual volume ▲ Demand is rising for "low-power double data rate 5 (LPDDR5)" with the launch of Nvidia's next-generation AI accelerator "Rubin" platform ▲ Demand has increased for server DDR5 RDIMM ▲ As DRAM inventories shrink, other customers can also move to place orders ▲ Capital expenditures (CAPEX) related to DRAM are expected to increase meaningfully through 2026.
Raising its view on Korea's chip sector from "In-Line" to "Attractive," Morgan Stanley said it recommends securing investment opportunities in the NAND flash and commodity DRAM cycle.
Morgan Stanley picked Samsung Electronics as its top pick and gave it an "Overweight" rating. It set a target price of 97,000 won.
Morgan Stanley said, "Although Samsung Electronics shares have rebounded from a recent low, they remain attractive at 1 times price-to-book ratio (PBR; market capitalization ÷ net worth) and 9.6 times price-to-earnings ratio (PER; market capitalization ÷ net income) based on expected 2026 results."
Morgan Stanley also raised its investment view on SK hynix from "Equal-Weight" to "Overweight" and set a target price of 410,000 won.
Morgan Stanley said that while there are concerns about competition in the high-bandwidth memory (HBM) market led by SK hynix, AI demand is expected to offset them. In particular, it assessed that SK hynix has become a major beneficiary of surging eSSD demand, centered on its NAND flash subsidiary Solidigm.