Tech Bytes: Memory – A Healthy Reset

Research evidence excerpt

Tech Bytes: Memory – A Healthy Reset

Idea

June 10, 2026 09:25 PM GMT

Morgan Stanley & Co. International plc+MTech Bytes | Asia Pacific Shawn Kim

Equity Analyst

Memory – A Healthy Reset Shawn.Kim@morganstanley.comMorgan Stanley Asia Limited+ +44 20 7677-1018

Duan Liu

Corrections are necessary for the cycle to continue. DRAM is the EquityDuan.Liu@morganstanley.comAnalyst +852 2239-7357

main bottleneck to the AI build-out but the market concerns on

Morgan Stanley & Co. International plc+

the durability of this cycle. We think multiple expansion can be a Cindy Huang

bigger driver of returns from here. We revise up bear cases EquityCindy.Huang@morganstanley.comAnalyst +44 20 7425-2915

substantially for Samsung and SK hynix.

Morgan Stanley & Co. International plc, Seoul Branch+

This reset on price performance does not mean the cycle is over. Our core view is Ryan Kim

that the cycle is still accelerating, earnings revisions remain robust and more Ryan.G.Kim@morganstanley.com +82 2 399-4939

sustainable than most believe. The earnings revisions justify the rally – the earnings

estimates for memory companies are up just as much as the stocks are – and the

LTAs justify a re-rating potential.

Memory cycles – a long-term perspective. We should be near peak cycle by year-

end if we go by the historical DRAM cycle duration and a re-rating needs: (1) the

supply side to behave, and (2) demand must convert into durable economics in the

long-run as well. Prior cycles were never about demand but supply discipline which

never held. AI structural demand on top of undisciplined supply is just a longer cycle

with a much higher peak, which is a consensus view at the moment.

Memory prices will decline, the cycle always turns as current investment plans