A Dip Like This Only Comes Once a Decade

Summary

The presenter argues that the sharp pullback in memory stocks may be an opportunity because demand—especially from AI data centers—remains strong, and customer commitments are firmer than in past memory cycles. He cautions, however, that memory is cyclical, forecasts are uncertain, and supply growth could eventually pressure prices.

The sector’s recent volatility followed a statement from Chinese memory maker CXMT about developing denser server memory. The presenter says the announcement included no speed, volume, or customer details, yet SK Hynix shares fell about 10% in a day. Memory-related stocks had fallen roughly 20% to almost 50% from June highs, compared with a 3% decline in the Nasdaq 100 over the same period. Gold was also down more than 25% from its January record.

Memory market by product

HBM (high-bandwidth memory)

HBM is stacked memory placed close to AI processors. It is the fastest and most expensive type, and the presenter says it requires roughly three times the factory space per unit of storage compared with conventional memory.

• SK Hynix reportedly produces about half of global HBM and says customers are requesting about twice what it can currently ship.
• Industry HBM capacity is expected to rise 50–60% next year, but the presenter estimates that a 20–25% shortfall may remain for SK Hynix’s customers even after capacity expansions.
• New capacity is expected to arrive gradually: initial additions from SK Hynix in Korea and Micron in the US in 2027, followed by larger projects from Samsung and Micron in 2028.

DRAM (conventional working memory)

DRAM is used in servers, phones, and computers. Supply is growing about 20% annually, while demand is growing somewhat faster. UBS reportedly does not expect supply and demand to balance until around 2028; one forecast cited suggests prices could then fall about 20%.

• SK Hynix says long-term agreements cover more than half of its expected 2027–28 output and expects shortages to last until 2030.
• The presenter says CXMT plans to nearly double its production space this year and already accounts for nearly one-tenth of global conventional-memory spending.

Flash memory and SSDs

The presenter sees this as the first segment likely to move toward oversupply. Forecast supply growth is about 25% a year, against demand growth of just under 20%. Analysts expect supply to catch up in the second half of 2027, potentially putting prices under pressure.

• SanDisk shares were reportedly still up more than 400% year to date despite falling over 40% since June.
• The video cites quarterly results above expectations, data-center sales up about 60% in three months and contributing over 40% of sales, and next-quarter earnings guidance of about $56 per share versus a $53 analyst forecast.
• SanDisk reportedly bought back about $5 billion of shares in one quarter. Consumer sales fell about 29% quarter over quarter, but represented less than 4% of sales. An eight-for-one stock split was scheduled for November 20.
• Its longer-term plan forecasts only about 10–19% sales growth from 2028 to 2030, which the presenter views as a sign that growth may moderate.

Hard drives

No new factories have been announced; output is increasing through higher disk density, at about 25% annually, while demand is growing faster. Morgan Stanley reportedly expects shortages through 2028, and the presenter found no forecasts calling for lower prices.

• Western Digital reportedly shipped about 22% more storage than a year earlier and charged about 28% more per terabyte, contributing to sales growth of more than half.
• Seagate said much of its data-center production is reserved through 2028, with some cloud contracts extending to 2030.

Company results and valuation points

• SK Hynix: The presenter describes a record quarter despite China-related concerns and a helium-supply disruption from Qatar. He says the company earned about 80 cents of operating profit per dollar of sales, versus 47 cents a year earlier. The subtitles render its quarterly operating profit as 62 billion won; this figure may contain a transcription or unit error.
• Samsung: Reportedly also posted a record quarter and said next year’s HBM output was sold out. The subtitles state group operating profit of about $80 billion, a figure that may also reflect a transcription or unit error. The presenter says Samsung is not directly listed in the US but can be accessed through certain funds.
• Micron (MU): The presenter says sales were nearly five times higher year over year, with about 81 cents of operating profit per dollar of sales. Micron reportedly holds $12.7 billion in customer funds tied to non-cancelable agreements, a change from prior cycles when customers could simply cut orders.
• Rambus (RMBS): Rambus does not manufacture memory but supplies data-flow chips used in about 45% of new server memory modules. Sales reportedly grew about 22%, while shares fell 47% since June. The presenter says its business is less directly exposed to memory-price swings.
• The video compares Seagate at about 18 times next year’s expected earnings with Micron at about 5 times. It also presents memory companies as potentially inexpensive relative to expected growth, while emphasizing that historic memory-cycle declines make low multiples risky.

Investing approach and illustrative returns

Brian says he is not a day trader and generally plans to hold investments for three to five years. He describes using dollar-cost averaging rather than trying to identify the exact bottom.

His three-year illustrations start with Wall Street earnings expectations and assume companies retain their current share-price-to-earnings multiples. He provides base, pessimistic, and optimistic cases, but says even the pessimistic case assumes the shortage continues; a full cycle downturn could produce worse results.

Estimated value of $1,000 after three years in his analysis:

• Western Digital and Seagate: around $3,000 each; medium confidence.
• SanDisk: a little over $2,500; medium-to-low confidence, given the expected easing in flash supply.
• Micron: around $2,500; medium confidence, with substantial disagreement among analysts about 2028 earnings.
• SK Hynix: around $1,900; medium-to-low confidence, partly because few analysts cover its US-traded shares.
• Rambus: around $1,600; the presenter says this estimate is relatively dependable because it is less tied to memory prices.

These are the presenter’s scenarios, not guaranteed returns.

Ways to access the stocks and funds

• SK Hynix ADR: The video says one Nasdaq ADR represents one-tenth of a Korean share but trades at about a 48% premium to the Korean-listed shares. That premium has fluctuated and could fall, reducing returns even if the company performs well.
• Direct Korean shares: The presenter says Interactive Brokers opened Korean-market trading in May.
• ETFs:
  • Roundhill Memory ETF (DRAM): 0.65% annual fee; about three-quarters of holdings are in Micron, Samsung, and SK Hynix. It was up about 95% since its April launch. The presenter notes that although Micron is about 28% of the fund’s exposure, only about 3% is actual Micron stock; much of the exposure is through bank contracts.
  • iShares South Korea ETF (EWY): 0.59% annual fee; Samsung and SK Hynix each make up nearly a quarter of the portfolio. It overlaps with DRAM by almost half, so the presenter says investors may not need both.
  • iShares Semiconductor ETF (SOXX): 0.33% annual fee and about 11% invested in memory—more than VanEck Semiconductor ETF (SMH), according to the video. SOXX and SMH overlap by about 69%; the presenter cautions against holding both.
• The video says Fidelity charges an additional 5% purchase fee on DRAM, capped at $100 per transaction—for example, $50 on a $1,000 purchase. It says Schwab may introduce a similar fee, while Vanguard, Robinhood, and E*TRADE do not charge one.

Sponsored gold segment: Mayfair Gold

The video includes a paid promotional segment for Mayfair Gold Corporation and its Fenn-Gibb project near Timmins, Ontario. It cites about 4.3 million ounces explored, a company-research estimate of $470 million after-tax project value—about 2.5 times the company’s value—using a gold price of $3,100 per ounce, and a target for first gold in 2030.

The segment says Macquarie acquired about $7 million of Mayfair shares and proposed a loan that could cover about two-thirds of construction costs; the loan was not final. It also cites holdings by Oaktree Capital, Muddy Waters, and company insiders.

The presenter explicitly cautions that the project still needs permitting and construction, the loan is not finalized, and gold prices could fall. He urges viewers to do their own analysis.

Disclosures and cautions

Brian says he is not a financial adviser and that the video is for educational purposes. He also says nothing is guaranteed and that investors should investigate before acting. The Mayfair segment is identified as sponsored; its financing and mine-development plans are not certain. The video warns that memory stocks are cyclical and that historical drawdowns could recur.

Presenters and sources

Presenter: Brian, of BWB – Business With Brian Sponsored company: Mayfair Gold Corporation

Companies and institutions cited: SK Hynix, CXMT, Micron, Samsung, Rambus, SanDisk, Western Digital, Seagate, Microsoft, Google, Apple, Amazon, Nvidia, UBS, Morgan Stanley, Macquarie, Oaktree Capital, Muddy Waters, and Interactive Brokers. Wall Street analyst estimates and company management commentary are also referenced.