①Goldman Sachs expects,$Samsung Electronics (005930.KR)$and$SK hynix (SKHY.US)$NAND average prices are expected to rise year over year by 34% and 30% next year, respectively, with the rate of increase narrowing significantly; ②$Kioxia Holdings (285A.JP)$In 2028, more than half of the projected shipments are expected to be secured under long-term contracts, and negotiations have begun for supply arrangements spanning 2029 to 2030; ③ Kioxia's fourth-quarter revenue is forecast to grow by only 3% quarter-over-quarter, which Goldman Sachs attributes to shipment delays and a high base effect.
Cailian Press, November 2 (Editor: Xia Junxiong) — Despite a sharp rise in NAND flash memory prices in 2026 and an expected significant slowdown in revenue growth for some manufacturers in the fourth quarter, Goldman Sachs believes that the industry's supply-demand imbalance has yet to ease, leaving room for further price increases in 2027.
On November 2, Goldman Sachs released a research report noting that the latest earnings and business outlook from Japanese memory chip manufacturer Kioxia indicate that demand from data centers and the enterprise segment remains robust, supporting the medium- to long-term prospects of the NAND market. The firm expects,$Samsung Electronics (005930.KR)$and$SK Hynix (000660.KR)$The average selling price (ASP) of the NAND business is expected to rise year over year by 34% and 30%, respectively, in 2027.
More notably, Kioxia's 2027 production capacity has already been fully sold, and over 50% of its projected shipments for 2028 are secured through multi-year long-term supply agreements (LTAs). The company has even begun discussions with customers regarding supply arrangements for 2029–2030. Goldman Sachs believes this suggests that the likelihood of prolonged NAND supply constraints is increasing.
NAND price hikes may continue through 2027.
Kioxia's management expects that, supported by demand from data centers and the enterprise market, NAND supply‑demand imbalances will persist through 2027, paving the way for further price increases.
Although the pace of price increases is expected to slow following the sharp hikes in the first half of 2026, Kioxia emphasizes that no signs of a decline in ASPs have yet been observed.
Goldman Sachs believes this is broadly consistent with its outlook for Samsung Electronics and SK Hynix. The firm expects the ASPs of both companies' NAND businesses to rise by 34% and 30%, respectively, year over year in 2027. Although these growth rates are significantly lower than the projected 279% and 254% for 2026, prices are still expected to remain on an upward trajectory.
Looking at historical data, the current round of NAND price increases has been quite significant. In the first quarter of 2026, Samsung and SK Hynix's NAND businesses saw their dollar-denominated ASPs rise by 89% and 71%, respectively, quarter over quarter, with further increases of 67% and 56% in the second quarter. During the same period, Kioxia's ASPs rose by more than 100% and 70%, respectively.
Entering the third quarter, price increases have eased somewhat, but the ASPs of the three major manufacturers continue to rise. Among them, Samsung and SK Hynix posted quarter-over-quarter increases of 17% and 26%, respectively, while Kioxia's growth was in the mid-20% range.
This trend indicates that, although NAND prices may struggle to sustain the rapid rise seen in the first half of 2026, Goldman Sachs remains optimistic about price performance in 2027 amid expectations of continued supply-demand tightness.
Long-term supply negotiations have been extended through 2030.
In addition to rising prices, the advancement of long-term supply agreements and the extension of forward-supply negotiations are also key reasons why Goldman Sachs is optimistic about NAND's medium- to long-term prospects.
Kioxia disclosed that its 2027 production capacity has already been fully committed, and more than 50% of its projected shipments for 2028 are likewise secured through multi-year long-term supply agreements.
For capacity that remains uncommitted as of 2028, Kioxia is evaluating whether to pursue additional long-term customer commitments or to reserve a portion of its capacity in order to capitalize on potential upside opportunities in the future market. Discussions on this matter are currently ongoing.
Meanwhile, Kioxia has already begun discussions with its customers regarding supply arrangements for 2029–2030.
Goldman Sachs believes that the extension of long-term agreement discussions into 2029–2030 reflects customers' desire to continue securing supply beyond 2028, suggesting that the likelihood of a prolonged NAND supply shortage is increasing.
A similar trend is also evident among South Korean memory chip manufacturers. Goldman Sachs notes that Samsung Electronics and SK Hynix's customers are signing five-year long-term supply agreements and seeking even longer-term supply assurances.
These changes indicate that, amid persistently strong demand from data centers and the enterprise sector, customers are enhancing the certainty of future supply by entering into long-term contracts in advance.
Fourth-quarter growth among vendors has diverged, likely due to differences in shipment timing.
Despite a positive medium- to long-term outlook, Kioxia's fourth-quarter guidance fell significantly short of Goldman Sachs' expectations for its South Korean rival.
Results released on October 30 showed that Kioxia's third-quarter 2026 consolidated ASP, denominated in U.S. dollars, rose approximately 25% quarter over quarter, with comparable product prices increasing by just over 30%. Bit shipments grew by slightly more than 10%, driven primarily by demand from data center and enterprise‑level markets.
Goldman Sachs data shows that Kioxia's third-quarter U.S. dollar revenue increased by 39% quarter over quarter, outpacing Samsung Electronics' NAND business at 22% and SK Hynix at 26%.
However, based on Kioxia's guidance, a Goldman Sachs research report forecasts that the company's fourth-quarter revenue will grow by only about 3% quarter over quarter; by contrast, Goldman Sachs expects Samsung and SK Hynix's NAND businesses to post quarter-over-quarter revenue growth of 25% and 14%, respectively.
There are also significant differences in shipment forecasts. Kioxia expects its fourth-quarter bit shipments to be roughly flat, while Goldman Sachs projects that Samsung and SK Hynix will grow by 14% and 6%, respectively.
Regarding this divergence, Goldman Sachs offers two explanations.
First, for certain Kioxia products with longer lead times—particularly data center and enterprise‑grade solid‑state drives (SSDs)—shipment schedules will be shifted from the fourth quarter of 2026 to the first quarter of 2027, thereby impacting quarterly revenue performance.
Secondly, Kioxia's third-quarter revenue growth outpaced that of its South Korean rivals, creating a higher year-over-year base and making it easier for its fourth-quarter quarter-over-quarter growth rate to decelerate.
Therefore, Goldman Sachs believes that the discrepancy between Kioxia's fourth-quarter guidance and Korean manufacturers' expectations is likely attributable primarily to shipment timing adjustments and base-effect factors, and should not be used as a basis for concluding that overall NAND market demand has weakened.
As NAND prices have risen sharply, the profitability of major manufacturers has improved markedly. In the third quarter, Kioxia, Samsung's NAND division, and SK Hynix reported operating profit margins of 80%, 68%, and 72%, respectively. According to research reports, these three companies are expected to post fourth-quarter operating profit margins of 80%, 68%, and 73%, respectively, remaining at elevated levels.
Based on a positive outlook for the storage industry, Goldman Sachs maintains its "Buy" rating on Samsung Electronics and SK Hynix, with 12-month target prices of KRW 500,000 and KRW 3.5 million, respectively.
However, Goldman Sachs also cautioned that a worsening supply-demand imbalance in memory chips and weakening demand for end products such as smartphones and PCs remain risks facing the relevant companies.
In addition, declining AI capital expenditures and shifts in the HBM market landscape could also weigh on SK Hynix's revenue and profitability.
Editor/Deng