Memory Chip Supply Crunch Drives Another Round of Forecast Upgrades
In its latest research report, UBS has again revised its price forecasts for memory semiconductors upward, marking the tenth consecutive month of such adjustments. The move underscores the persistent supply-demand imbalance gripping the global market.
Substantial Increases in Quarterly Projections
The bank's analysts have significantly raised their quarter-on-quarter price growth estimates for the second half of the year. For the quarter ending September, the forecast was lifted from 16% to 32%. The projection for the October-December period was also increased from 10% to 12%.
Kioxia's Financial Outlook Brightens
Reflecting the more optimistic price environment, UBS has boosted its profit estimates for Kioxia Holdings. The operating profit forecast for fiscal year 2027 was raised to 9.18 trillion yen from 7.71 trillion yen. For fiscal 2028, the estimate was increased to 12.9 trillion yen from 10.9 trillion yen.
Consequently, the firm's target price for Kioxia was lifted to 144,000 yen from 132,000 yen, with a "Buy" rating reaffirmed.
Long-Term Contracts Take Center Stage
The report highlights a shifting market focus. Investors are now closely watching Kioxia's ability to secure long-term supply agreements, potentially spanning five years. UBS suggests that negotiations around such deals are likely to yield positive news, given the acutely tight market conditions.
This pivot from spot prices to long-term supply stability indicates a maturing phase in the industry's competitive landscape.