Bank of America said the memory-chip upcycle may prove more durable than the market has been worried about, pointing to continuing gains in DRAM prices, sharply higher capital-spending expectations for Google, and a potentially important set of signals from Samsung’s July 30 earnings call.
The article is a summary and interpretation of a Bank of America Securities research report dated July 24, 2026. Any ratings, earnings forecasts and related judgments cited in it are those of the firm’s analysts and do not represent TechFlowPost’s view or investment advice.
DRAM prices are rising faster than expected
After completing channel checks this week, BofA said more second-tier OEMs and module makers now agree that July PC DRAM contract prices were 15% to 20% higher than in June. If that pace holds, average DRAM prices in the third quarter could rise 30% to 40% quarter over quarter, far above TrendForce’s forecast of 13% to 18%.
Spot prices have been strengthening as well. BofA said DRAM spot prices gained another 2% to 3% this week. DDR5 16Gb spot prices have moved above $50, while DDR4 16Gb has climbed past $80, both well above the previous peak of about $10 seen in October 2017.
Trade data also points to strong demand. South Korea’s semiconductor exports totaled $22.1 billion in the first 20 days of July, up 181% from a year earlier. That figure was 13% below June’s record $25.5 billion, but still close to three times the 2025 monthly average of $8.2 billion. China’s memory imports reached a record $32 billion in June, up about 250% year over year and equal to 54% of the country’s total chip imports.
BofA said that despite expanding DRAM capacity at CXMT, Chinese OEMs and cloud companies still rely heavily on Korean chips, suggesting that the impact of domestic substitution remains limited for now.
Google capex is seen as a hidden driver of memory demand
On the demand side, BofA internet analyst Justin Post expects Google’s capital expenditures to reach $200 billion in 2026 and $300 billion in 2027, up from $91 billion in 2025. On that basis, Google’s memory-chip procurement in 2027 would be more than 50% higher than in 2026.
Post based that view on three points:
- memory is taking a larger share of big tech capex,
- under the LTA framework, DRAM and NAND prices may stay relatively stable while volumes rise,
- Google’s sales of TPUs to external customers could drive more purchases of Asian memory chips, including HBM.
Post also expects Google to post free cash flow of negative $16 billion in 2026 and negative $18 billion in 2027, before turning positive at $37 billion in 2028. Cash and equivalents are projected to remain above $50 billion in each year from 2026 through 2028. BofA said that gives memory suppliers a clear signal that a customer of Google’s scale has the financial capacity to support long-term procurement and provides a constructive backdrop for capacity expansion.
Samsung’s July 30 earnings call is framed as the next catalyst
BofA said Samsung’s second-quarter earnings call on July 30 could bring three catalysts at once.
Potential large-scale buyback
According to the report, Samsung needs treasury shares for a year-end special bonus. That bonus is based on 10.5% of semiconductor operating profit and is expected to exceed KRW 30 trillion, while the company currently has almost no treasury stock. BofA said a buyback of that size would normally require preparation months in advance, making disclosure of a plan at the earnings event likely.
Potential early dividend payment
The bank also said Samsung has more than 4 million retail investors. If the company pays 40% to 50% of its 2026 dividend in the fourth quarter, bringing the payment forward by one to two quarters, and distributes the remainder in the first quarter or in April next year, retail shareholders could spread taxable income across two calendar years.
More upbeat guidance
On operations, BofA expects Samsung to offer a more constructive outlook for the second half of the year and for 2027. The report’s view is that memory shortages will persist and that the LTA framework will help preserve stable, high margins.
The report focuses on a market timing gap
BofA’s core point is that the market is worrying about a cycle peak while the data is still moving higher. DRAM contract-price gains have outpaced expectations, which the bank said shows downstream demand is stronger than analysts had anticipated. Google’s projected capex jump from $91 billion in 2025 to $300 billion in 2027, in turn, suggests the memory-demand curve has not peaked yet.
The report added that capex on the order of $300 billion, tied to more than 50% additional chip procurement, should be enough to support supply-demand balance into 2027. At the same time, if Samsung uses its earnings call to signal buybacks, early dividends and a more optimistic 2027 outlook, the market’s concern that the cycle tops out in the second half of 2026 could face a reassessment.
China’s import data was cited as another signal. June memory imports hit a record $32 billion, up about 250% from a year earlier. Even with CXMT continuing to expand capacity, Chinese buyers are still purchasing Korean chips at that pace. In the report’s framing, domestic substitution, at least in higher-end products, still has a long way to go.
The original piece notes that it is a summary and interpretation of a third-party brokerage report. Any ratings, target prices, earnings forecasts and related judgments quoted are those of Bank of America Securities analysts, represent only their institution’s position, and do not constitute investment advice. It also warns that market risk remains and decisions should be made independently, and that the article should not be used as a basis for buying or selling securities.
