Newsletter · · Ashutosh Agarwal

Record Memory Profits Meet a China Shock and a Violent Round Trip - HBM & The Memory Supercycle - Week of August 1, 2026

A synthesis of what investor and operator podcasts said about memory and HBM for the week of July 25 to August 1, 2026, including SK Hynix and Samsung's record prints landing into a selloff, CXMT's 466 percent Shanghai debut, and Jensen Huang saying NVIDIA does not have enough bits.

HBM & The Memory Supercycle

Issue #5, Week of July 25 to August 1, 2026: Record Profits, a China Shock, and a Violent Round-Trip

TL;DR

  • The best earnings the memory industry has ever printed landed in the middle of the worst week its stocks have had all year. SK Hynix posted roughly $42 billion of operating profit at 80%-plus margins and still fell nearly 10%; Samsung's operating profit surged 1,800% and it closed red too. Both then snapped back ~22% by Friday after the Fed held rates.
  • The new variable is China. A memory maker most people had never heard of, CXMT, IPO'd in Shanghai and rocketed ~466% in a day to a ~$487 billion market cap, and a Chinese firm said it's now building its own lithography machines. That one-two punch, not any change in demand, is what actually broke the tape mid-week.
  • We finally heard from the buyer. NVIDIA's Jensen Huang, on the record: "We don't have enough bits. We're constrained in HBM memories… in just about every part of the supply chain." He also confirmed the HBM roadmap runs through HBM4, HBM4E "and beyond," and that NVIDIA has "large purchase agreements" with SK Hynix.
  • The cost is now showing up in your gadgets, by name. Amazon blamed part of a $220B capex number on "higher cost of memory chips." Apple fell 10% on component shortages, with Tim Cook calling the memory squeeze a "100-year flood." Garmin flagged memory as a headwind.

The hook

Imagine handing in a report card with straight A's and one A-minus, and getting grounded.

That's roughly what happened to the memory industry this week. SK Hynix and Samsung reported the most money either has ever made in a single quarter, genuinely historic numbers, and their shares got taken to the woodshed. South Korea's market fell so hard and so fast that regulators held an emergency meeting and slapped caps on the leveraged funds retail traders had been using to gamble on these very stocks. Micron dropped more than 10% in a session. SanDisk, up roughly 2,200% over the past year, lost half its value in a month.

And then, two days later, after the Federal Reserve left interest rates alone, the whole thing bounced, SK Hynix and Samsung each up about 22% by Friday.

So which is the truth: the record profits, or the crash? This week finally gave us the two things that argument has been missing: the buyer's own words, and a brand-new reason to worry.

What's new

1. The buyer speaks: Jensen Huang says NVIDIA literally can't get enough memory (operator, highest signal)

For four issues we've complained that we keep hearing about the memory shortage secondhand, from analysts, from pundits, from roadshow whispers. This week we got it straight from the single most important customer on the planet.

NVIDIA CEO Jensen Huang sat down with Bloomberg's Ed Ludlow in South Korea for a special edition of Bloomberg Tech (also carried on Bloomberg Surveillance, Bloomberg Intelligence and Bloomberg Talks, all July 25). Asked point-blank how badly he needs Korea to ramp up the supply of HBM bits, he didn't hedge:

"Well, we don't have enough bits. We're constrained in HBM memories, LPDDR memories. We're constrained in just about every part of the supply chain. We're even constrained now with land and power and construction workers to set up the data centers."

That is the CEO of the company buying the memory telling you he can't get enough of it. He went further on pace: "I think we have the ability as an industry to double each year. But we're going to have a hard time growing much faster than that." In other words, even flat-out, the whole supply chain can only roughly double annually, and he expects the buildout to run "in a throttled way… for a decade."

Two more things worth pocketing. First, Huang put hard numbers on the SK relationship: NVIDIA and SK Group have agreed to "over $500 billion of business with each other, whether it's consumption of and purchasing of memories or selling supercomputers," with SK Telecom building up to 2 gigawatts of "AI factories." He was blunt about the memory piece: "We're going to be purchasing memories from them for many years to come… we have large purchase agreements and large purchase intentions with SK Hynix."

Second, and this partly fills a gap we've flagged for weeks, he confirmed the HBM roadmap by name. Asked about NVIDIA's growing involvement in future HBM generations: "we started with HBM2, worked on HBM3, 3E, 4, 4E, and then beyond. And so we've got a whole roadmap of memories that we're working on together." That's not a yield or qualification update, but it does anchor that HBM4/4E is very much a live, jointly-engineered roadmap rather than a slide.

Why it moves the thesis: when the largest buyer says he's structurally short of bits and can only grow supply ~2x a year for a decade, the "glut next year" story gets a lot harder to tell. This is the strongest operator confirmation of the shortage we've had.

2. SK Hynix: the best quarter in its history was somehow a disappointment (earnings print)

SK Hynix reported after the Korean close on July 28. On The Rundown (July 29), host Zaid Admani laid out the numbers: "revenues more than tripled to roughly $55 billion. And operating profit jumped more than six-fold to roughly $42 billion… Margins topped 80% as the company continues to raise prices due to the shortage." (Different shows cited slightly different profit figures for the quarter, Buy Hold Rant said ~$41B, one CNBC anchor tossed out $64B, but all in the same jaw-dropping neighborhood.)

And yet both revenue and operating profit came in below Wall Street's estimates, a revenue shortfall of about $1.7 billion, per the hosts of Limitless (July 30), and the stock fell nearly 10% in Seoul, hitting an all-time low on its US-listed shares. It's now lost roughly half its value since its June peak.

The most useful color came from CNBC's Jim Cramer on Squawk on the Street (July 29), who explained why a record looked like a miss:

"This was one of the most confusing conference calls I've ever been on… you have these long-term agreements. This [was requested] by companies that are afraid that prices have gotten out of control… But the analysts themselves… were looking at the actual prices of DRAM and HBM. And they said, 'are you guys kidding me? You didn't make anywhere near what the spot market is.' And they said, 'well, listen, we're not using the spot market.'"

This is the crux of the whole "sold out" story in plain English: SK Hynix isn't riding the sky-high spot price, because it has locked huge volumes into long-term agreements at pre-set prices. CNBC's Christina Partsinevelos, same network on the 10am hour, confirmed the shape of it: "the company talked up 10 long-term deals locking in customers, spoke to pricing improving. The one thing that may have nagged investors, management said the memory shortage can't last forever and they're moving to expand supply." Management guided capex up roughly 50% this year, to at least $31 billion, which is exactly the kind of number that revives glut fears.

Why it moves numbers: the LTAs are a double-edged sword. They give you visibility (SK Hynix says demand can outpace supply through 2030, and it's readying HBM4E for NVIDIA in 2027) but they cap the upside, you don't get the spot windfall. That's the tension the stock is wrestling with.

3. The China shock: a company you'd never heard of became China's most valuable (the new variable)

Here's the development that actually broke the tape. On July 27, a Chinese DRAM maker called CXMT (ChangXin Memory Technologies) went public in Shanghai and closed up ~466% on day one, reaching a market cap of roughly $487 billion, instantly the most valuable China-listed company, ahead of Tencent. As Tech Brew Ride Home (July 27) reported, CXMT held a 7.67% share of the global DRAM market in 2025 and swung to an operating profit of 35.43 billion yuan in Q1, from a loss a year earlier. Yi Yi Capital CEO Theodore Shou, quoted from CNBC's Squawk Box Asia: "I have no doubt the company is going to grow to be a global leader… it can be a global champion in this particular sector."

On The Rundown (July 28), Admani connected it to the second China headline: a state-backed Chinese firm has begun producing its own immersion DUV lithography machines, the tools needed to print chips, long a near-monopoly of Dutch giant ASML. CXMT's revenues, he noted, "jumped from less than $1 billion a year ago to $7.5 billion this year," with a $4.9 billion operating profit in Q1, and there are reports Apple is testing CXMT's DRAM for devices sold in China. The reaction was brutal: the KOSPI crashed ~11%, SK Hynix and Samsung each fell 13%, and ASML dropped ~6% (down 17% cumulatively by week's end, per All-In, July 31).

Why it matters: for the first time, the bear case has a concrete face. But read the fine print before you panic, see The Debate.

4. The cost is now hitting your gadgets, and CEOs are naming it (read-through, operator)

This was the week the memory squeeze stopped being an investor story and became a consumer one, spoken out loud by the people who buy the chips.

On Tech Brew Ride Home (July 31): Amazon raised its 2026 capex forecast to $220 billion, a $20 billion increase, and CEO Andy Jassy "attributed part of the increase to the higher cost of memory chips for data centers." Same episode: Apple fell about 10%, its worst day in 16 months, after warning that component shortages would hit its sales forecast. Per the reporting, "Apple has been struggling to secure enough computer processors and counter fast-rising memory costs, a situation that forced the company to raise prices on Macs and iPads last month," and CEO Tim Cook "likened the memory cost issue to a 100-year flood." Constraints will hit more Macs, iPhones and iPads this quarter.

That's the read-through we've been tracking for four issues, now stated by name from the C-suite: the memory bill is being paid at the checkout counter.

The debate

Same fight, sharper this week: is this a multi-year structural shortage, or a classic memory cycle about to roll over, now with a Chinese accelerant?

The structural case (buy the shakeout):

  • Jensen Huang, on the record, says NVIDIA is short of bits across the entire chain and the industry can only ~double supply per year. The buyer is telling you it's real.
  • SK Hynix says demand can outpace supply through 2030 and has 10 customers locked into long-term agreements; Samsung says the shortage and demand "will continue."
  • The selloff was mechanical, not fundamental. On Squawk on the Street, Cramer described a Korea 3x-leveraged Hynix fund that "was at 36 on June 22nd… now it's at 1" and called Korea "the most gambling country I have ever seen." On Limitless, the hosts cited JP Morgan saying the leveraged-ETF liquidation was "about 90% complete," meaning the forced selling is nearly done.
  • The China scare is overblown, the bulls argue. Ejaz on Limitless dismantled the solar-panel analogy: solar is a static commodity, "whereas memory is very dynamic… DRAM is kind of like tap water… HBM is that premium bottled stuff. They're totally different things." And China's homegrown lithography is barely off the ground: "how many of these machines… five. And next year they're aiming for 10… it's a nothing burger," versus ASML shipping 131 last year. On top of that, China is itself starved of memory because the incumbents sell overwhelmingly to the West.
  • Valuation looks absurd on the bull math. On Buy Hold Rant (July 30), the hosts noted Micron trades near 5x next year's expected profit and bought back shares they'd sold at $1,050 to $1,200 down in the $760 to $800s: "where can you buy a company for five times [next year's] profits?"

The cyclical case (this is the top):

  • Management is admitting the ceiling. SK Hynix said "the memory shortage can't last forever" and is expanding supply; capex is up ~50% to $31B; Samsung is expanding too. As The Rundown put it: "When prices go up, memory makers overbuild and prices then come crashing down." That's the entire history of this industry in one sentence.
  • China is the wildcard that changes the math. On The Financial Exchange (July 28): "when the Chinese government and Chinese industry decides that they want to get into a space, they tend to remove all the profit from that space," as with solar, EVs and rare earths. Even skeptics concede that once CXMT closes the equipment gap, the supply picture changes.
  • The macro is turning against long-duration bets. On All-In, the hosts flagged a market-implied ~53% chance of a rate hike in September and asked the obvious question: "Why the heck would I pay 50 times earnings for a semiconductor stock" when Treasuries pay ~5%? Michael Burry is reportedly short Micron and NVIDIA.
  • The demand line itself could bend. Cheaper Chinese open-source AI models (Kimi K3 and others) keep raising the fear that inference gets far more efficient, meaning less compute, and less memory, per task than the linear extrapolations assume.

Where both sides now agree: the physical shortage doesn't unwind this year, new fabs are years out, and the buyer is on record as bit-constrained. The fight is entirely about (a) what the stocks are worth after a ~100% first-half run, and (b) whether China's entrance eventually flattens the long-term margin structure. This week, the tape voted "sell first" and then, once the Fed held and the forced selling burned out, "just kidding," a round-trip that tells you positioning, not fundamentals, is driving day-to-day prices.

Stocks in play

SK Hynix (000660 KS / US-listed)

  • Bull: Record quarter, 80%+ margins, ~51% HBM share, 10 LTAs, HBM4E to NVIDIA in 2027, demand seen outpacing supply to 2030. Half off its June high.
  • Bear: Leverage-fueled Korean tape is a casino; capex +50% ($31B) revives glut fear; Samsung is gunning for its HBM share; management itself says the shortage "can't last forever."
  • Watch: Whether the US ADR premium fully collapses now that the listings converge; monthly DRAM and HBM contract-price direction; any HBM4E qualification or yield milestone at NVIDIA.

Samsung Electronics (005930 KS)

  • Bull: Operating profit up 1,800%, above expectations; says the shortage continues; explicitly targeting the same ~38% share in HBM that it already holds in DRAM by year-end, a direct assault on SK Hynix. (Source: Morning Call, July 30.)
  • Bear: Closed red on the print; if it does take HBM share, that's incremental supply, and it comes out of Hynix's hide, which is bearish for the group's pricing discipline.
  • Watch: Actual HBM share gains through year-end; whether "38% HBM by year-end" is real or aspirational.

Micron (MU)

  • Bull: ~22% DRAM share; makes HBM that CXMT can't; trades near ~5x next year's profit; secured allocation for marquee customers. Bulls say the CXMT IPO validates how valuable memory share is.
  • Bear: Down ~10%+ on the China scare; Michael Burry reportedly short; hostage to the same glut, China and rate-hike overhang as the group.
  • Watch: Contract-pricing commentary; any read on whether CXMT is winning sockets (e.g., Apple's China devices).

SanDisk (SNDK) / Seagate / Western Digital (NAND and storage)

  • Bull: Seagate blew out, revenue +48% to $3.6B, guided way above (EPS $7.30 vs $5.85 expected), stock +5% and up ~400% over 12 months, raising prices into AI storage demand. NAND is genuinely tight (see Solidigm, below).
  • Bear: SanDisk fell ~50% in a month (still +2,200% on the year, this trades like a meme stock); memory names were ~88% of net retail selling this week, per Vanda Research.
  • Watch: NAND contract-price direction; whether the long-term-contract shift actually dampens the next downcycle.

CXMT (China DRAM, not investable for US accounts, but watch it)

  • Bull (for China): ~$487B market cap, DRAM share from ~1% to ~10% in four years, Q1 operating profit already ~$4.9B, state backing, possible Apple design-in.
  • Bear (for China): Can't make advanced HBM yet due to export controls; homegrown DUV lithography is a prototype at ~5 machines this year; incumbents remain years ahead technically.
  • Watch: Whether homegrown DUV ships in volume; any US move to block Chinese DRAM imports (a genuine two-edged risk).

Read-throughs

Memory and test equipment, a rare operator datapoint. For the first time in weeks we got a real equipment print: Advantest (6857 JP), the chip-test leader, reported record quarterly profits and raised its revenue and profit guidance, and the stock surged, dragging up Tokyo Electron and Kioxia with it (Morning Call, July 30). That's a tangible read that memory and HBM test intensity is translating into orders. Lam Research was a post-Fed leader as chips rebounded (Stock Market Today With IBD, July 30). Not everything was rosy: KLA fell ~8% on worries about its pricing power (Squawk on the Street 10am, July 29), and ASML and Applied Materials were hit hard on the China DUV-lithography scare before recovering.

NAND and storage, the clearest supply read of the week. On Tech Disruptors (July 27), Bloomberg Intelligence's Jake Silverman interviewed Shin Guo, co-CEO of Solidigm (SK Hynix's enterprise-SSD arm, the former Intel NAND business), a genuine operator voice. The standout line: "in some form factors, we've seen 700% price increases in the last 12 months." Guo tied it to the shift from human-driven to machine-driven demand, explaining that agentic AI can carry "2,000x" the data footprint of a single chatbot query, and reprised a rule of thumb that "for every gigawatt of AI CapEx, that translates to about 25 exabytes of incremental flash creation." On the cycle: NAND will still be cyclical, "but… the volatility of the next downturn may be a little less pronounced" thanks to long-term contracts, and "the pricing will come down, but the demand would continue to grow… I don't see we going into a severe oversupply anytime soon." Hard-drive prices are rising alongside DRAM too (Daily Tech News Show, July 30).

GPU makers (NVIDIA, AMD). NVIDIA is the memory bull's best witness (Huang above) but the stock briefly lost its "most valuable company" crown to Apple during the AI-rotation selling. AMD fell ~9% in the mid-week China-scare session (The Financial Exchange, July 28). The circular-financing worry, NVIDIA backstopping customers like OpenAI, remained a background drag on sentiment all week.

PC, handset and consumer OEMs. The costs are landing here now, explicitly: Apple's Cook ("100-year flood," price hikes on Macs and iPads, supply hitting the next iPhone quarter), Amazon's Jassy ($220B capex, part blamed on memory), and Garmin flagging higher memory costs as a headwind (Motley Fool, July 30).

Hyperscaler capex, still climbing. Microsoft's Azure grew 43% (accelerating), backlog up 84%, and the CFO signaled more spending in 2027; Amazon lifted capex to $220B; Google is at ~$205B on the high end. Meta was the exception the tape punished: it kept its ~$145B capex top end but saw free cash flow plunge ~91% and gave a muddled message on selling compute, and fell ~9% (Morning Call, July 30). Net: the demand envelope funding memory purchases is still expanding.

What changed vs. last week

Last week the story was the price and stock decoupling, and a narrative rotation out of memory and into power. This week was the opposite: a blockbuster.

  • We finally got the buyer on the record. Jensen Huang's "we don't have enough bits" is the direct operator confirmation we've been missing for a month, and it came with an HBM2 to HBM4E roadmap name-check.
  • Real earnings prints replaced roadshow whispers. SK Hynix (~$42B operating profit, 80%+ margins, 10 LTAs) and Samsung (+1,800%, targeting 38% HBM share) reported actual numbers, including a fresh competitive wrinkle: Samsung openly gunning for Hynix's HBM lead.
  • China moved from footnote to headline. For four issues, CXMT and YMTC were "mentioned in passing." This week CXMT's ~466% IPO and China's homegrown DUV lithography were the swing factor in a global selloff. That's a real change to the bear case's specificity.
  • Two long-standing gaps got partially filled: an equipment operator print (Advantest record plus raised guidance) and a NAND operator voice (Solidigm's Shin Guo, "700% price increases," "25 exabytes per gigawatt").
  • The read-through to consumers got explicit and named (Cook, Jassy, Garmin), versus last week's more general "pass-through" framing.
  • And the tape did a full round-trip: violent selloff into the Fed, then a ~22% two-day bounce in the Korean names once rates held and the leveraged unwind burned out.