BofA: Global Memory> Super-Cycle Intact: The Bo

BofA: Global Memory

> Super-Cycle Intact: The BofA memory indicator remains near record highs (reaching 183 in May, well above past peaks of 120–130). High-end memory demand (HBM4, SOCAMM, etc.) continues to drive exceptional strength.

> Massive Revenue Growth Forecasted for 2026: Global DRAM revenue is expected to nearly quadruple (+325% YoY) in 2026, primarily driven by a sharp rebound in Average Selling Prices (ASPs). NAND revenue is similarly projected to jump nearly fourfold (+299% YoY) in 2026.

> Servers & AI Dominating DRAM: Servers—especially AI systems utilizing High Bandwidth Memory (HBM)—now account for over half of total global DRAM demand due to high memory density per system.

> SSDs Fueling NAND: Enterprise and data center Solid State Drives (SSDs) utilized in AI applications now make up more than 50% of total NAND demand and sales, commanding a price premium over standard IT applications.

> Sizable Share of AI Hardware Budgets: High-bandwidth memory (HBM) and advanced data center memory now command a massive 35% to 40% of total cloud AI infrastructure spending. Big Tech's cloud and AI capex is projected to push close to $1.5 trillion by 2027.

> HBM Supply Cannibalization: Producing an HBM chip requires 3x to 4x more silicon wafer capacity than traditional DRAM. Because they share the same production lines, manufacturers are prioritizing high-margin HBM, starving the market of standard capacity.

> DDR5 Premium Disappears: The rapid exit of tier-one manufacturers from mature products has triggered a severe, structural shortage in legacy DDR4. BofA notes that spot prices for 16Gb DDR4 and DDR5 have essentially converged into the $35–$40 range. The traditional technology premium of DDR5 over DDR4 has largely vanished because manufacturers are dropping DDR4 production faster than PC and server customers can physically transition their setups.

Massive Revenue Surge Forecasts (2026E)

> Total Market Expansion: Combined DRAM and NAND revenue is projected to nearly quadruple to $891.8 billion in 2026E (up from $214.8 billion in 2025).

> DRAM Performance: DRAM revenue alone is expected to increase by +325% YoY to $568.8 billion in 2026E. This hyper-growth is heavily back-loaded, with quarterly revenue ramping up aggressively from $83.9 billion in 1Q26E to $182.6 billion by 4Q26E.

> NAND Performance: NAND revenue is forecast to surge +299% YoY to $323.1 billion in 2026E, climbing from $45.3 billion in 1Q26E up to $102.4 billion in 4Q26E.

High-Bandwidth Memory (HBM) Deep Dive

> TAM Scaling: The Total Addressable Market (TAM) for HBM is projected to hit $76.8 billion in 2026E (+122% YoY) and skyrocket to $134.6 billion by 2027E.

> Astounding Profitability: The industry average Operating Profit Margin (OPM) for HBM is sitting near a massive 49% for 2026E, climbing even higher to 54% in 2027E.

The Technology Shift (HBM Mix):

2026E: Mainstream volume is dominated by HBM3e (60%) and HBM4 (32%).

2027E: The mix flips heavily into HBM4 (64%), while the next-gen HBM4e begins its entry at 19%.

2028E–2030E: The long-term horizon shows rapid transition into HBM5+, which is expected to command 79% of the market mix by 2030E.

> Server Intensity: AI+HBM server units are scaling to 4.5 million systems in 2026E, with memory intensity per server jumping to 1,413 GB per AI server.

Pricing (ASP) & Shipment Dynamics

> The Rebound Driver: The entire super-cycle is pricing-driven. Blended DRAM Average Selling Prices (ASPs) are modeling a +249% YoY expansion in 2026E ($13.0 per 8Gb equiv. unit vs. $3.7 in 2025). Blended NAND ASPs are modeling a +238% YoY increase.

> Quarterly Pricing Velocity: The fastest pricing momentum occurs in the first half of the year, with DRAM ASP growth showing a massive +73% QoQ spike in 1Q26E and +53% QoQ in 2Q26E, before cooling down to normal levels (+21% in 3Q, +7% in 4Q).

Capex & Capacity Expansions

> Massive Investment Outlays: Total industry Capex spending (DRAM + NAND) is projected to jump +62% YoY to $118.7 billion in 2026E.

> DRAM vs. NAND Split: Manufacturers are funneling the vast majority of cash into DRAM, ramping DRAM capex by +65% YoY to $88.6 billion. NAND capex is expanding much more modestly at +55% to $30.1 billion.

> Wafer Capacity: Total DRAM wafer capacity is expanding to 2,066k wafers per month in 2026E, out of which 23% of all global DRAM wafer capacity is being swallowed up solely by HBM production.

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