The endpoint of this semiconductor cycle is unlikely to be in 2026.

Tue, 12 May 2026 00:19:22 +0800

Regarding this round of semiconductor trends, I temporarily do not see a peak in 2026.

If forced to give an initial judgment, as of May 12, 2026, I am more inclined to place the truly critical period between the second half of 2027 and the first half of 2028, rather than now. The core driver of this current uptrend—particularly in US listed storage and Korean semiconductors—is not a general recovery, but rather AI pulling HBM, DDR5, and enterprise SSD up simultaneously. If supply expansion fails, both prices and profits will rise together.

This also explains why companies like Micron, SK hynix, and Samsung seem to be “printing money” lately. The semiconductor cycle hasn’t vanished, but this time it is unlikely to collapse when demand first kicks in; rather, it is more likely to crash when capacity expansion finally catches up, and the market has already front-loaded two or three years’ worth of profit.

Executive Summary: Why I Doubt the ‘End by 2026’ Prediction

Place a few pieces of primary and semi-primary source materials on the table first.

Connecting these signals makes the answer clearer.

This cycle is neither the traditional PC cycle, nor is it driven by smartphone replacement cycles, and certainly not a simple rehash of the “semiconductor shortage due to the pandemic.” Its engine is the capital expenditure from major hyperscale AI data centers, and the massive throughput requirements for memory and storage needed by AI servers are simultaneously stressing HBM, DDR5, high-capacity DIMMs, and enterprise SSDs. Micron was quite direct in its investor materials last December: “Overall industry supply is significantly below demand in the foreseeable future, and this tightness will persist well beyond 2026.”

In other words, the market isn’t betting on “whether things will be better next year,” but rather on “whether the period of tension before 2027 will end.” If this premise is not broken, the cycle will struggle to wind down on its own by 2026.

Why Did This Round Ignite Both US Storage Stocks and Korean Semiconductors

Many people tend to view the US memory/storage sector and South Korean semiconductors as two separate issues. In reality, these two trends are expected to largely converge by 2026.

Micron represents the most direct memory sector beta on US stock markets. Reuters, in a report on March 19, 2026, noted that Micron’s stock price has already risen by over 61% this year. Furthermore, the company increased its capital expenditure plan for fiscal year 2026 by another $5 billion, bringing the total amount to over $25 billion. This move itself indicates one thing: management acknowledges that existing capacity is insufficient to meet the demand generated by the current wave of AI development.

Korea was even more dramatic. SK Hynix hit an all-time high on May 4, 2026, closing up 12.52% that day. The same Reuters report also mentioned that high-ranking officials from the Bank of Korea judged that this chip cycle upturn might last longer than previous cycles. This statement is not groundless, as the two most core memory manufacturers in Korea have repeatedly released similar information during their earnings reports and conference calls.

Samsung even stated directly during its conference call at the end of April 2026 that, “based solely on the already received demand for 2027, the supply-demand gap in 2027 will be even larger than in 2026.” This statement is very significant. It means that the market’s current surge isn’t due to people competing for 2026 earnings, but rather they are preemptively trading the 2027 shortage.

Therefore, the most crucial characteristic of this market cycle is not the “overall semiconductor boom,” but rather:

AI has turned the most lucrative memory sub-sector into a bottleneck for the entire industrial chain.
HBM will consume DRAM capacity and advanced packaging resources, simultaneously constraining commodity DRAM as well.
The demand for SSDs in servers and the inference side no longer simply follows PCs or mobile phones; rather, it is directly tied to large model infrastructure.

When these three factors are combined, Micron, SK hynix, and Samsung’s profit elasticity will be enormous. The memory industry is inherently a high operating leverage sector, so when ASP rises, profits often do not increase linearly; instead, they jump significantly.

How Have Past Semiconductor Cycles Typically Concluded?

I don’t want to turn this section into a semiconductor chronicle (or history). What is truly powerful/disruptive in terms of investment, and therefore worth remembering, are actually the following cycles.

Cycle Phase	Approximate Duration	Termination Details	Data Observed at End of Cycle
1998-2000 Uptrend	Approx. 2 years	Dot-com bubble burst, decline in PC and mobile demand, overstocking pressure	Global semiconductor sales dropped from $2.04 trillion in 2000 to $1.39 trillion in 2001, a year-on-year drop of 32%
2002-2007 Uptrend	Approx. 6 years	Global Financial Crisis first depressed valuations, then suppressed end-user demand	Sales dropped from $255.6 billion in 2008 to $248.6 billion, and again by 9% to $226.3 billion in 2009
2016-2018 Uptrend	Approx. 3 years	Slowing growth rate in the second half of 2018, price cycle reversal combined with trade friction	Global sales dropped to $412.1 billion in 2019 (a year-on-year drop of 12.1%); memory sales dropped 32.6%, and DRAM dropped 37.1

Looking at this table, the pattern is actually quite straightforward.

The semiconductor cycle truly ends not usually because of “overvaluation, so it must fall.” It often requires two out of three conditions (or even all three) to appear simultaneously:

\[ \text{Cycle Peak} \approx \text{Supply growth rate catches up to demand growth rate} + \text{Inventory reversal from low levels} + \text{Marginal weakening of end-user demand} \]

To put it more simply:

The release of new capacity begins.
Clients are shifting from frantic purchasing to cautious observation.
Leading companies no longer talk about shortages but start discussing inventory, cost, and pricing pressures.

Died in a demand collapse and inventory in 2001.

Died in the macro crisis of 2008–2009.

Died in the price cycle and trade disruption of 2019.

De-stocking following the depletion caused by the pandemic in 2023.

So, one theory I am most skeptical of right now is that “the semiconductor has risen too much, so it must end soon.” Cycle peaks do not form this way. They require the underlying supply and demand relationship in reality to ease first.

What exactly is the difference between this round and the 2021-2022 round?

During the 2021-2022 cycle, many chips saw price increases, but the underlying logic was rather scattered. Automotive, home appliances, mobile phones, PCs, and servers were almost all engaged in restocking inventory, while the pandemic severely disrupted the supply chain. The conclusion of that cycle was also quite typical: end-user demand declined, channel inventories remained high, and the industry began a collective correction.

The cycle in 2026 will be more concentrated and more dangerous.

The focus is on money being poured into AI data centers. Although there are fewer sources of demand, the intensity at specific points is much greater.

The danger is that these types of needs are not everyday consumer goods in a completely market-driven way, but rather driven by the capital expenditure of several super large companies. Once cloud vendors and platform providers discover:

GPU utilization was not as high as expected;
Inference revenue realization is slower than capital expenditure;
Agentic AI has failed to achieve commercialization;
Or macroeconomic environment, tariffs, energy, and exchange rates are extending the return cycle.

The demand growth rate will drop very quickly.

The industry has not entered this stage yet. On the contrary, what can be seen is that multiple tech giants are continuing to heavily invest in AI infrastructure. Under SIA figures, global semiconductor sales already reached $791.7 billion in 2025 and are projected to approach one trillion US dollars by 2026. Samsung also clearly stated that server memory demand will remain strong in the second half of 2026 as hyperscalers accommodate enterprise AI and LLM services.

This is why I judge that: 2026 looks more like a year of concurrent price increases and expanded production, rather than a peak year.

When will this round most likely end?

I’ll give you a baseline assessment; nothing too mystical/over-the-top. (Alternative translations depending on context: I’ll provide a basic evaluation, keep it simple.)

My Benchmark Scenarios

If there is no sudden global recession, nor a dramatic collapse in AI capital expenditure, this semiconductor uptrend is more likely to enter a danger zone starting in the second half of 2027, and genuine cyclical peak characteristics will be easier to observe in the first half of 2028.

There are four reasons.

First, supply has a physical lag.

Whether it’s Micron scaling up its CAPEX, or Samsung and SK hynix expanding their HBM and associated production lines, establishing cleanrooms, acquiring equipment, optimizing packaging processes, and achieving stable yields all require significant time. While every company knows that money is lucrative right now, announcing expansion today does not mean they can deliver products tomorrow.

Secondly, the demand/requirements for 2027 have already been pre-booked/committed.

Samsung already mentioned multi-year binding contracts, but the conference call content reported by Reuters was even more direct: the potential supply-demand gap in 2027 might be larger than in 2026. This signal is very critical. It means that leading customers are not buying on a quarterly basis, but rather locking resources on an annual or even multi-year basis.

Third, this round is not just about HBM.

If it were only about HBM, one could still explain the situation as “advanced products are strong, but everything else is average.” However, Samsung, SK hynix, and Micron’s current consensus indicates broader tightness across DRAM and NAND, particularly for high-capacity server DRAM modules, AI-oriented eSSDs, and storage related to KV cache. As long as this diffusion continues, the cyclical trend will keep propagating outward.

Fourth, the stock market typically peaks ahead of earnings reports, but it does not peak before the overarching narrative (or storyline).

The current main narrative is “shortages, price hikes, locked orders, and insufficient expansion.” Only when the main narrative shifts to “expansion realized, peak prices, and customers no longer rushing to buy” will the stock price truly seem to have peaked.

Under what circumstances might it end early

There is also a possibility that it could reach its peak sooner.

If two or three of the following events occur simultaneously between Q4 2026 and H1 2027, I would significantly become more cautious:

Cloud vendors are starting to revise down their AI capital expenditure growth rate.
Leading memory manufacturers no longer emphasize shortages, but instead focus on CAPEX, depreciation, and yield ramp-up.
Standard DRAM / NAND prices flatten or even reverse before HBM.
Budgets for mobile phones, PCs, and enterprise IT cannot keep pace with high-priced memory, thereby cooling demand.
Macro-level factors such as recession, tariff escalation, energy shock, or local production disruptions in Korea.

The fifth point, in particular, should not be underestimated. The 2008-2009 cycle already proved that even if the semiconductor industry is strong, it cannot withstand a simultaneous decline in macroeconomic credit and demand.

What to Focus On: Not ‘How Much It Has Risen,’ But These Turning Points

If you care about when the cycle ends, I suggest watching these signals rather than looking at daily stock price colors.

Indicators to Monitor	Suggests if It Remains Strong	Suggests if It Starts Weakening
The description of supply/demand for 2027 in leading company earnings reports	The cycle is still extending	Leading companies start preparing for a slowdown
Capital expenditure and progress of new cleanrooms / packaging facilities	Supply is still catching up to demand	Could plant seeds of oversupply in the next 12-18 months
Pricing and delivery times for DRAM / NAND / eSSD	Tightness is spilling from HBM to broader sub-markets	Supply starts moderating/softening
Scope of Hyperscaler AI CAPEX	The end-market engine is still pressing the accelerator	The most important demand source of the cycle has eased up
Inventory and booking behavior	Customers are still scrambling for capacity	Customers shift from rushing to buy to waiting for goods

My own criterion for judgment is simple: As long as the industry continues to emphasize supply shortages rather than inventory cleanup/recovery, this cycle has not truly ended.

Conclusion

As of May 12, 2026, my conclusion is:

This semiconductor cycle is highly unlikely to end in 2026.
The massive surge in US storage and Korean semiconductors is due to one factor: AI has completely unlocked the profit elasticity of the memory complex.
The end mechanism of past cycles is not mysterious; the core elements are simply falling demand, rising inventory, and supply catching up.
The most probable critical period this time is neither now, but from the second half of 2027 to the first half of 2028.

Of course, this doesn’t mean we should rush into investing blindly now. How can I put it? For an industry like semiconductors, what they truly fear is never the economic “boom” cycle itself, but rather everyone believing that the boom will continue indefinitely, leading them to desperately overexpand capacity during high-profit years.

The cycle usually doesn’t die when it’s worst, but when it’s best, hottest, and most out of stock.

References

Writing Notes

Original Prompt

Recently, semiconductor-related stocks have been soaring, covering U.S. storage/memory and Korean semiconductors. I need to gather relevant information to predict when this current semiconductor cycle will end. Also, how did past semiconductor cycles conclude, and for how long did they last?

Summary of Writing Approaches

First, clarify why this rally is so strong before discussing when it will end; otherwise, the prediction lacks foundation.
The body article intentionally separates firsthand facts from my judgment, avoiding presenting time-sensitive information as permanent conclusions.
The historical section does not try to cover every small fluctuation but only focuses on the few major downturns most significant for investment.
The predictive section avoids making “fortune teller”-style single-point guesses on the peak; instead, it provides a baseline timeframe and trigger conditions for an early top.
This article intentionally did not elaborate on the independent cycles of wafer

Extended Brainstorming

Topic	Include in Main Text?	Reason
Analyzing NVIDIA and TSMC together	Partially Downplayed	They are important, but they will pull the theme from the memory cycle toward the entire AI industry chain, which is easy to lose focus on.
Expansion of domestic Chinese storage and mature processes	No	It affects supply, but this piece’s main thread is US memory/storage and South Korean semiconductors

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