The semiconductor industry has analyzed four clear signals indicating that the global semiconductor industry has entered a new super cycle. In addition, unlike the past super cycles driven by IT and mobile, 2025 will present new structural features, including the diversification of growth drivers in the semiconductor market, including artificial intelligence (AI), data centers, and autonomous driving, as well as competition for high-performance, high value added storage (HBM) and foundries.
Four signs of semiconductor supercycle
Analysis shows that the semiconductor industry is entering a semiconductor super cycle, with repeated signs of soaring demand, supply shortages, and price surges. This is the first semiconductor supercycle to appear in seven years since 2018. The technology industry predicts that this semiconductor supercycle will last at least until 2027. Industry analysts believe that there are four clear signals indicating the arrival of a super cycle.
Firstly, with the large-scale construction of artificial intelligence (AI) computing data centers, the demand for AI accelerators is rapidly increasing. The growth in demand for AI accelerators will drive an increase in demand for HBM, which will benefit companies such as Samsung Electronics and SK Hynix. It is worth noting that Samsung Electronics has recently passed NVIDIA's HBM3E quality test and is reportedly in talks about supply. This means that it can compete with the leader SK Hynix in the supply competition of the next generation HBM4. NH Investment&Securities analyst Ryu Young ho said, "Thanks to the acquisition of diversified customers such as AMD, Samsung Electronics' sluggish HBM shipments are expected to rebound. It is expected that Samsung Electronics will achieve the highest growth rate among the three major DRAM companies by 2026. ”
Global semiconductor companies will shift their focus to HBM production, and the decline in General DRAM production is seen as the second sign of a supercycle. HBM is manufactured by stacking and bundling DRAM like an apartment building. Memory semiconductor companies, including Samsung Electronics, have converted their DRAM production lines to dedicated high value-added HBM, resulting in a decrease in DRAM production. On the contrary, as the large-scale general-purpose servers built in 2017 and 2018 enter the update cycle, the demand for general-purpose DRAM on servers increases. According to market research firm TrendForce, the average inventory of global DRAM suppliers reached a historic low of 3.3 weeks at the end of the third quarter of this year. The decline in DRAM supply has led to a surge in prices. According to DRAMeXchange data, the average contract price for general-purpose PC DRAM (DDR4 8Gb) in September was $6.30, an increase of 10.5% compared to the previous month. This is the first time since January 2019 that the average contract price of DDR4 has exceeded $6 in six years and eight months.
The third sign of the super cycle is that as artificial intelligence expands into the field of inference, data collection and storage require independent storage, leading to an increase in eSSD (Enterprise SSD) sales. With Samsung Electronics' LPDDR and GDDR products being applied to Nvidia's new artificial intelligence technology, the price of memory semiconductors is on the rise. Chinese memory companies such as Changjiang Storage and Changxin Storage have not yet caught up with Korean companies in the cutting-edge DRAM field, and are unable to increase production after switching to HBM, which is also a sign of the super cycle.
Supercycles with different structures
According to the analysis of the technology industry, the semiconductor supercycle in 2025 will present structural differences from the past. Based on this, they predict that the semiconductor boom will last at least until 2027. The semiconductor supercycle in 2018 and earlier was mainly driven by the demand for mobile devices such as smartphones and PC substitutes, as well as early investments in cloud computing (virtual servers). The current super cycle is driven by large technology companies investing in artificial intelligence (AI), creating a new trend in the high-performance semiconductor market. Large data centers, high-performance computing, and autonomous driving semiconductors used for artificial intelligence (AI) computing will lead the market, while semiconductors used for the Internet of Things (IoT), mobile devices, and household appliances will form the supporting market, driving growth.
Although the products that previously drove the supercycle were storage semiconductors such as general-purpose DRAM and NAND flash memory, this time the focus has shifted from qualitative changes to high-end storage products such as HBM for AI accelerators that are high-performance, high value-added, and high profit. In the past, the volatility of the semiconductor market was characterized by three to four or four to five years of supply-demand imbalance, price fluctuations, industry downturn, and then recovery. However, the structural changes driven by the growth of AI and HBM customized orders are weakening the cyclicality of business cycles, indicating the emergence of "non cyclical" trends.
Meritz Securities analyst Jin Shanyu stated that "the DRAM industry is currently experiencing a strengthened structural boom," and added, "Simply put, an investment decision in an AI data center will have a similar effect as a temporary surge in demand for millions to tens of millions of smartphones. ”
This structural super cycle is expected to directly benefit Samsung Electronics, which has the largest production capacity in the memory semiconductor industry. Xingguo Securities analyst Sun Renjun said, "It is expected that by 2026, Samsung Electronics will account for 32% of the industry's DRAM production and 30% of NAND flash production (based on wafer investment), making it the company expected to benefit the most from the memory supercycle. ”
Samsung Electronics plans to regain its leading position in the memory semiconductor market. According to a report by market research firm Counterpoint Research, Samsung Electronics regained its leading position in the memory market in the third quarter of this year, with sales reaching $19.4 billion, surpassing SK Hynix ($17.5 billion). Analysts predict that Samsung Electronics' strong performance will continue for some time. Korea Investment&Securities has raised its 2026 operating profit forecast by 36% to KRW 73 trillion, higher than its previous estimate of KRW 54 trillion.