AI Boom Drives Memory Industry Supercycle as Samsung, SK Hynix Supply OpenAI
Samsung and SK Hynix have signed significant deals with OpenAI to supply DRAM for its massive Stargate AI project. This has led to a surge in demand, causing a bullish 'supercycle' in the memory industry. Micron Technology's shares have soared to record highs amidst this growth.
OpenAI's Stargate project requires immense computing power, driving demand for high-performance DRAM. Samsung alone has committed to delivering up to 900,000 DRAM wafers per month, which is about 40% of the entire DRAM market today. This deal, along with OpenAI's agreements with SK Hynix, has sparked a bullish 'supercycle' in the industry.
Micron Technology, one of the world's leading memory companies, has seen its shares close almost 9% higher on Wednesday, reaching all-time highs. The company has demonstrated its technology leadership by being the first to ship the 1y DRAM node to the industry last quarter.
The memory industry, traditionally cyclical, is experiencing a potential longer-lasting upcycle due to the advent of artificial intelligence. OpenAI's Stargate project, with its massive DRAM requirements, is a significant driver of this growth. The deals between OpenAI, Samsung, and SK Hynix, involving the supply of undiced wafers, are likely to lower costs for OpenAI while boosting the industry's prospects.
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