TrendForce (TrendBank Consulting) raised its forecast for next year's HBM prices to a year-on-year increase of 121%. On the same day, a Samsung executive also spoke up, saying that HBM next year will absorb nearly 30% of DRAM makers' wafer production capacity. Storage and optical communications both jumped to the forefront last night. Micron and SK hynix both closed higher, while Lumentum and a few of Corning's shares rose even more sharply. Corning also still has an AT&T optical fiber contract in hand.
But the broader market didn’t keep up. U.S. long-term Treasury yields broke above 5.6%, hitting a new high in more than 20 years. The Dow, S&P, and Nasdaq all closed slightly lower. With rates this high, growth stocks' valuations have been under continuous pressure. This kind of upside in memory just isn’t enough to look significant against the index. I hesitated on this trade from last year until now. Seeing quotes kept getting pushed higher, I still didn’t dare to jump in.
HBM is competing with standard memory for the same pool of wafer production capacity. If HBM cuts off a chunk, there’s less left for ordinary memory. The only major players with mass-production capability globally are basically Samsung, SK hynix, and Micron. The apparent capacity elasticity for next year doesn’t look particularly strong.
But the broader market didn’t keep up. U.S. long-term Treasury yields broke above 5.6%, hitting a new high in more than 20 years. The Dow, S&P, and Nasdaq all closed slightly lower. With rates this high, growth stocks' valuations have been under continuous pressure. This kind of upside in memory just isn’t enough to look significant against the index. I hesitated on this trade from last year until now. Seeing quotes kept getting pushed higher, I still didn’t dare to jump in.
HBM is competing with standard memory for the same pool of wafer production capacity. If HBM cuts off a chunk, there’s less left for ordinary memory. The only major players with mass-production capability globally are basically Samsung, SK hynix, and Micron. The apparent capacity elasticity for next year doesn’t look particularly strong.