Recent price movements in memory markets (especially NAND and DRAM) indicate that the market is in an "extended cycle" shaped by AI infrastructure investments, rather than a classic boom-bust cycle. While cumulative increases exceeding 100% in contract prices in the first half of 2026 are giving way to a high level of consolidation, market dynamics suggest prices will remain high for a considerable period.

Morgan Stanley's Asia & Europe Technology Research team predicts that the pace of memory price growth will peak in the fourth quarter of 2026. A critical nuance that the market often misinterprets is this: it's not an expectation of a price crash, but rather a slowdown in growth momentum and an extension of the current high-price cycle. The report's key arguments are based on the following specific metrics:

-- Peak Reversal in Earnings Revisions: The momentum for net profit revisions for memory manufacturers has slowed from 92% to 77%. The market is no longer revising its growth expectations upwards at the same aggressive pace.

-- Inventory Accumulation: NAND inventories, particularly at module manufacturers, have reached approximately 13 weeks, approaching the 15-week historical peaks seen during the pandemic. Inventory pressure is increasing as annual growth slows.

-- Pullback in Valuation Multiples: As investor focus shifts from "how much further will the price rise?" to "how long will high profitability last?", forward P/B ratios for SK Hynix and Samsung (approximately 2.5x and 1.7x respectively) have been pressured.

-- Slowing Annual Growth Rate: The annual (YoY) growth rate in contract prices has begun to reverse from its peak.

Morgan Stanley's thesis argues not that prices will fall, but that astronomical jumps will give way to a flat and high profit ratio.

-- While an aggressive rally in memory prices reaching 70% quarterly as seen in 2026 is not expected in 2027, a continuation of the upward trend is highly likely. The biggest catalyst in this is NVIDIA's CMX (Context Memory eXtension) platform.

-- Massive Demand Jump: NAND demand stemming from CMX, which was approximately 35 million TB in 2026, is expected to exceed 100 million TB in 2027. This volume represents the entry of a massive buyer, almost "the size of a new Apple," into the market.

-- Capacity Allocation: Manufacturers who have allocated 60% of their V9 production capacity directly to NVIDIA are accelerating their V10/V11 processes for CMX, continuing to squeeze supply on the consumer side (SSDs, memory cards).

-- The AI ​​server demand and the capacity bottleneck created by CMX will ensure that prices continue to rise throughout 2027 and remain at historical highs, even if the rate of price increase slows. Given the expanded capital expenditure (CapEx) plans of major tech companies and the continued construction of AI infrastructure, it is highly likely that memory prices will remain high even into 2028.

In light of the data, a structural loosening of the price curve and a return to previous cost levels seems unlikely even in the first half of 2028. The full commissioning of new factories, the completion of production process transitions, and the ability of supply to steadily exceed the massive AI demand will likely take until the last quarter of 2028 or the beginning of 2029. Until then, high costs and supply constraints in the memory market will remain the "new normal" for the industry. This is not investment advice.