On Tuesday, January 6, SanDisk Corp.'s stock price surged 28%, marking its best performance since February. This followed a speech by Nvidia CEO Jensen Huang at CES, who emphasized the necessity of memory and storage.

The stock has shown strong momentum, rising more than 47% in the first three trading days of 2026 and surging 1080% since bottoming out on April 22. On Tuesday, it became the best-performing stock in the S&P 500, followed by storage companies Western Digital and Seagate Technology, both of which saw double-digit percentage gains.

"In terms of storage, this is currently a completely untapped market. It's a market that has never existed before, and it's very likely to become the world's largest storage market, carrying the working memory for global artificial intelligence," said Jensen Huang at CES on Monday.

Jack Silverman of Bloomberg Intelligence stated that the growing demand for AI training and inference has led to tight memory supply and soaring prices, thus driving up digital storage stocks. He also noted that Huang's remarks at CES "indicate that demand for NAND flash memory from Nvidia systems will remain strong."

Memory prices have been steadily rising. Earlier this week, the Korea Economic Daily reported that Samsung Electronics and SK Hynix planned to raise server DRAM prices by 60% to 70% in the first quarter of this year compared to the fourth quarter of last year.

In a report sent to clients on January 4th, Bank of America analyst Wamsi Mohan and his team noted that SanDisk and other storage device companies are seen as "major beneficiaries" of the "AI inference and edge AI" trend expected in 2026. Mohan anticipates that enterprises will retain more and more data for purposes such as training, analytics, and compliance, and storage demand will "skyrocket in tandem." He specifically mentioned the growing demand for storage in sectors such as drones, surveillance, vehicles, and sports technology.

Mohan wrote, "To date, the focus of AI investment has been on capital expenditure and AI model training, which has triggered the next wave of hardware spending. Looking ahead to 2026 and beyond, we expect AI inference to dominate."

Samsung and SK Hynix shares also surged

Strong exports fueled rising expectations for fourth-quarter earnings from Samsung Electronics and SK Hynix, sending both companies' shares to new record highs.

On the first trading day of the new year (November 2nd), foreign investors bought 300 billion won worth of Samsung Electronics shares on the Korea Composite Stock Price Index (KOSPI), ahead of the company's fourth-quarter earnings report next week.

Samsung Electronics' operating profit for the quarter hit a record high of 17.57 trillion won, the highest since the same period in 2018, while market expectations continued to climb, with recent consensus forecasts reaching 18.7 trillion won. Some securities firms even predicted profits exceeding 21 trillion won.

"Samsung Electronics' earnings forecast has been revised upwards due to the depreciation of the won and a significant increase in memory prices," said Kim Yun-ho, a researcher at IBK Investment & Securities. He added, "Samsung Electronics' DS division's operating profit is expected to increase by 64% year-on-year this year."

However, foreign investors continued to execute a "long Samsung Electronics, short SK Hynix" strategy, net selling 84 billion won worth of SK Hynix shares. In addition to acquiring Korea-US Semiconductor (worth 132.3 billion won) and Samsung Electronics preferred stock (worth 72.8 billion won), Samsung Electronics also made significant gains.

Most importantly, import and export trend data released in December showed that semiconductor exports reached $20.8 billion, a 43.2% increase year-on-year, driving up stock prices across the semiconductor value chain.

Compared to the previous month, DRAM exports increased by 15.3%, and NAND flash memory exports increased by 15.8%, contributing to record-high export performance.

Semiconductor exports typically slow at the end of the year, but December saw a significant increase, raising expectations for this year's performance.

Korean semiconductor yields far surpass those of US semiconductor companies, thanks to strong share prices for Samsung Electronics and SK Hynix.

On the same day, the KRX Semiconductor Index rose 6.78%, with a cumulative monthly gain of 14.2%. The KRX Semiconductor Index comprises Korean semiconductor companies such as Samsung Electronics, SK Hynix, Korea-American Semiconductor, and Rino Industries.

On the other hand, the Philadelphia Semiconductor Index, comprised primarily of US semiconductor companies like Nvidia and Broadcom, rose only 0.82% in a month, showing weak performance.

The Philadelphia Semiconductor Index, mainly composed of semiconductor design companies, saw its share prices surge in 2024, driven by the growth momentum of artificial intelligence (AI). However, since the second half of last year, the index has stagnated due to declining profitability and increased cost burdens caused by investment competition among large technology companies.

Meanwhile, South Korean semiconductor companies are benefiting from soaring memory prices, and their profit expectations are also rising.

"The spot market prices for DDR4 and DDR5 chips continued to rise strongly in December, indicating that supply pressures are intensifying," said Kim Sun-woo, a researcher at Merrill Lynch. "The fixed prices for memory supplied by vendors in the first quarter of this year appear to have increased by 50% to 60% compared to the previous quarter."

On the same day, CLSA announced that it would raise its earnings forecasts given the solid fundamentals of major export commodities and released a 2026 forecast report for the South Korean market. CLSA predicts that the Korea Composite Stock Price Index (KOSPI) will see a 42% year-on-year increase in net profit in 2026, with the semiconductor industry contributing 65% of the profits.

Meanwhile, the KOSPI surpassed its all-time high of 4221.87 points set on November 3rd of last year in just two months. This marks the fifth time since its inception that the KOSPI has reached a new all-time high on the first trading day of the new year.

In 1988, influenced by three periods of low oil prices (low oil prices, low interest rates, and low exchange rates), the 2006 reserve fund boom, and increased global liquidity following the US quantitative easing policy in 2011, the index reached a new all-time high on its first trading day.

On January 4, 2021, individual investors who spearheaded the "Donghak Ant Movement" bought Samsung Electronics shares, pushing the price above the $2944.45 mark.

In December, the Korea Composite Stock Price Index (KOSPI) rose 2.27%, driven by a shift in supply and demand towards the semiconductor industry, which saw strong export performance. However, the KOSPI index fell to 523 points, while stocks rose to 373 points.

Source: Compiled from Bloomberg, etc.

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