A Morgan Stanley research note that's turned bearish on memory chips is genuine and has been circulating among investors, semiconductor analyst Jukan reports after confirming it with his own sources, and he says it may be one reason Korea's KOSPI stock index has been sliding the past few weeks. The analyst behind it, Shawn Kim, argues that NAND flash chipmakers are holding roughly 13 weeks of unsold inventory, nearly as much as the 15-week peak seen during Covid, and that demand has evaporated. He expects price increases to slow sharply, to just 5% per quarter in the fourth quarter, which removes customers' incentive to buy early and stockpile. Big cloud computing companies say their own chip inventories are already healthy, Tencent has reportedly locked in 90% of what it needs, and China's CXMT is ramping up supply fast, all of which is pulling supply and demand back into balance. NAND prices on the spot market have been falling for two months. The note extends the same bearish logic to DRAM, the more common memory chip, and even trims growth expectations for HBM, the specialized high-margin memory used in Nvidia's AI chips, capping it near 40% based on data from research firm TrendForce. Jukan adds that a rival analyst's more bullish channel checks lean heavily on conversations with US cloud firms, whom Kim's camp suspects may be overly optimistic about AI demand.
Why it matters · This is the most concrete bear case memory investors have seen in a while, coming from a major Wall Street desk with specific numbers on inventory, pricing, and even a cap on HBM growth, and it's reportedly already moving South Korea's stock market, which matters because HBM and the broader memory supercycle have been one of the central bullish theses behind SK hynix and Samsung Electronics.
Worth asking · Morgan Stanley's bear case rests on inventory and pricing data that could shift again within a quarter, while bulls point to structural AI demand that hasn't shown up in this note. Is this the start of a real memory downturn, or a data blip that gets overwhelmed by AI buildout demand later this year?