📌 NAND Price Recovery Still Constrained by Capacity Expansion
If NAND demand and prices are recovering, whether supply continues to tighten is the key to whether margins can continue improving. The current change is that neither international manufacturers nor Chinese manufacturers have stopped expanding: Samsung and SK Hynix are increasing investment in NAND production bases in China, with related capital expenditure expected to continue into next year.
This means that price improvements driven by recovering demand may not automatically translate into a longer high-profit cycle. The speed at which new capacity ultimately comes online, whether demand growth can absorb supply, and whether manufacturers maintain their investment pace will all determine how far the price recovery can go. For memory manufacturers, volume growth can certainly increase revenue, but simultaneous supply increases will limit the scope for price hikes and also reduce the contribution of improved capacity utilization to profits.
YMTC’s operating data further shows that Chinese suppliers have a foundation for expanding their influence. SKundojjala said that YMTC’s capacity utilization rate reached 98% in 1Q26, while capital expenditure intensity fell from 114% of revenue in 2023 to 17%; revenue during the same period exceeded USD 6.5 billion, already surpassing 82% of full-year CY25 revenue. High utilization means existing capacity is not sitting idle, while lower capital expenditure intensity means the funding pressure of expansion on current revenue is declining.
Therefore, the core risk to NAND price recovery is not only demand falling short of expectations, but also supply returning to the market faster than expected. Continued investment in China by international leaders, occurring alongside YMTC’s efficiency improvements, is not yet sufficient to conclude that prices will weaken, but it is sufficient to make the premise of “long-term tight supply” harder to sustain.
▌ Sources