Storm in the memory market significant price updates for Micron and SanDisk
Investment bank Mizuho steps up its forecasts for memory giants Micron and SanDisk.
The bank's analysts maintain an 'outperform' rating for both companies, and significantly raise their price targets:
Micron - price target rises from $390 to $480.
SanDisk - price target jumps from $410 to $600.
What is driving the optimistic forecast?
The main story here is a 'tailwind' of price increases in the memory market.
This mainly concerns DRAM and NAND components - these are memory chips found in almost every technological device, from servers to smartphones.
Mizuho claims that this price increase will dramatically improve sales and profit margins for the memory group during 2026.
The supply and demand equation is out of balance
There is much more demand than supply.
Demand for NAND components (memory used for data storage) is expected to grow by more than 20% in 2026.
The main driver behind this growth is the world of artificial intelligence - AI-based servers require enormous amounts of memory to operate, which creates heavy pressure on existing inventories.
On the other hand, while demand is soaring, the production side is lagging; in 2026 and 2027, no new production facilities are expected to open for 'wafers' (the silicon plates from which chips are manufactured).
This means there will be no source for new goods to meet the growing demand.
The dramatic surge in prices
The combination of supply shortages and accelerated demand from AI servers is expected to lead to an unprecedented surge in memory prices.
According to the forecast:
In 2026, annual NAND prices are expected to jump by 330% compared to the previous year.
In 2027, prices are expected to rise by an additional 50%.
The market's inability to increase output in the next two years promises, according to Mizuho at least, a period of exceptional profitability for these companies.
Is Mizuho correct in its forecast?
We will continue to monitor and update