SK Hynix's Warning in Vain? Micron Technology Stock Rebounds, DRAM and NAND Flash Prices Expected to Rise Further

Despite warnings from South Korean memory giant SK Hynix (SKHY-US) that current memory price levels are not sustainable in the long term, causing concerns about memory stocks, U.S. memory giant Micron Technology (MU-US) saw its stock price rebound after three consecutive days of decline, closing up 1.9% on Monday (20th) at $865.46.

According to Barron's, this rebound has temporarily eased market concerns, as Micron's stock price has plummeted nearly 30% over the past month. The company's market value also fell below the $1 trillion mark last Thursday, marking the first time since June 5.

Although the current market value has not yet returned to the trillion-dollar threshold, Monday's rise is seen as the first sign of stabilization.

On May 26, Micron's market value first surpassed $1 trillion. Benefiting from the rapid development of artificial intelligence (AI) technology driving a surge in memory demand, Micron's stock price has accumulated a nearly 700% increase over the past year.

However, just as the market was cheering for Micron's performance, SK Group Chairman Choi Tae-won stated at a press conference last week that the current memory price levels are 'not normal.'

According to the Korea Herald, Choi Tae-won said, 'Prices will ultimately have to return to normal levels... otherwise the market will shrink and attract more competitors.'

However, Barron's believes that this warning actually highlights that the memory market remains very strong in the short term.

Choi Tae-won also stated that he expects overall memory demand to grow by nearly 60% next year, and demand will continue to exceed supply, at least until 2027.

Wall Street also holds the same view. For example, KeyBanc estimates that dynamic random access memory (DRAM) prices will rise 15% to 20% in the third quarter compared to the second quarter, and another 15% increase is expected in the fourth quarter.

As for NAND Flash prices, they are expected to increase by 30% to 40% in the third quarter, with another 15% increase expected in the fourth quarter.

In a research report, KeyBanc analyst John Vinh noted, 'We expect that the tight supply-demand situation in the memory industry may not begin to ease until at least 2028, as new cleanroom capacity expansions will not begin to contribute to supply until the second half of 2027, and even then, the growth rate of new capacity may not keep up with the increase in demand.'

Vinh gave Micron stock an 'overweight' rating with a target price of $1,750.