Following up from Wednesday’s email about Chinese open weight AI models… I had a bunch of questions about if this is bullish or bearish for memory manufacturers like Micron and SK Hynix…
Well consider this…
SK Hynix already has its entire production capacity for DRAM, NAND and HBM (three different types of memory chips) is sold out through the end of 2026.
Micron exited the consumer memory market entirely to focus only on enterprise and AI customers.
Meaning that if you wanted to buy a laptop or a server with standard memory in it right now, you'd be competing for scraps against companies building AI data centers, and the AI data centers are winning.
And the conclusion fo Wednesday’s email was that companies like Nvidia get paid regardless of which AI lab wins, since practically every model on Earth runs on Nvidia chips.
The memory makers are the same trade, just one layer down.
Every AI chip needs memory sitting right next to it to function, the same way a chef needs a cutting board next to the stove. AI models don't just need computing power, they need somewhere to hold enormous amounts of data while they're "thinking."
The more powerful the AI model… the more memory it needs… and the more memory it needs per chip, not just per company.
So open models don't reduce how much memory the world needs… instead they multiply the number of buyers who need it…
And Samsung, SK Hynix and Micron get paid by the buyer, not by the model.
(This was is a key reason why we recommended Micron at $80/share back in January 2025, with many Capital Gains Multiplier students profiting handsomely…)
And which is why all three major memory manufacturers have now individually crossed $1 trillion in market value.
None of them make the AI models… they just make the memory that every single AI chip, no matter who builds it or where, cannot function without.
So with forecasts suggesting supply will still only meet about 60% of demand by the end of 2027 even after nerw factories come online… methinks the memory trade still has a way to go.
Oliver