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Nomura: Memory chip demand will keep growing rapidly through 2028; AI investment outlook is overly feared
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Nomura released a global memory chip industry report on October 20, judging that demand for memory chips will still grow rapidly through 2028. The institution believes that although the revenue growth of AI companies has slowed and financing prospects have raised concerns, the industry's strong rally is still expected to continue for a longer period. The report lists Samsung Electronics and SK Hynix as key recommended stocks, assigning both a "Buy" rating, with target prices of 670,000 Korean won and 4.7 million Korean won, respectively.
Market concerns mainly come from two aspects. Recently, the bond prices of AI company CoreWeave plunged, intensifying financing pressure, and investors worry that it will cut capital expenditure; technological progress at China's ChangXin Memory Technologies has also raised concerns about increased supply. Nomura believes the market has overestimated the risk of AI companies cutting demand.
The institution estimates that OpenAI and Anthropic together saw revenue grow 507% year on year in the third quarter of this year. To meet market expectations for full-year revenue, the two companies still need substantial growth in the fourth quarter. On this basis, Nomura judges that AI demand has not cooled across the board.
Regarding the funding difficulties of data center operators such as CoreWeave, Nomura said risks in individual businesses may rise, but this is unlikely to cause investment across the entire AI industry to stall. Data centers and equipment that have already been built can be used by other operators. Continued global data center expansion will still support memory chip demand.
Nomura tracking data show that global data centers are expected to add 22.3GW of capacity this year and increase to 31.5GW next year. The institution expects memory chip demand growth to continue exceeding supply growth, thereby supporting prices. The combined net cash of nine semiconductor companies including Samsung Electronics and SK Hynix will rise from $282 billion in the second quarter of this year to $2 trillion by the end of 2028.
Nomura also cautioned that if data center investment plans continue to shrink or be delayed, memory chip demand forecasts will need to be re-examined. The market will still need to watch the AI financing environment, data center construction progress, and changes in memory supply. The institution remains optimistic about the medium- and long-term prospects of the memory chip industry.
