Taiwan Semiconductor Manufacturing Co. (TSMC) signage on the floor of the New York Stock Exchange (NYSE) in New York, US, on Friday, Jan. 2, 2026.
Michael Nagle| Bloomberg | Getty Images
Semiconductor stocks rallied to start the year, led by the world’s biggest memory chip firms that are getting a boost from continued artificial intelligence-related demand.
South Korea’s SK Hynix and Samsung Electronics, the world’s two biggest memory makers, are up 11.5% and 15.9% respectively year-to-date. Micron is 9% higher this year.
Memory is a core component of the type of chips required to train and run AI models such as those designed by Nvidia and AMD. As tech giants continue to spend billions of dollars buying those chips and building out AI data centers, memory is in short supply.
In particular, a specific component called dynamic random-access memory or DRAM, which is used in AI data centers, saw a huge price spike in 2025. Memory prices are expected to rise another 40% through the second quarter of 2026, according to Counterpoint Research.
“The recent rally across the semiconductor space has been driven largely by the memory side of the market rather than logic chips,” Ben Barringer, head of technology research at Quilter Cheviot, told CNBC by email.
“We’re seeing a combination of very strong demand from AI workloads and relatively constrained supply, particularly in high-bandwidth memory, which is essential for training and running large AI models.”
This is seen as positive for Samsung, SK Hynix, and Micron as they are expected to be in a position to charge a higher price for their memory chips as demand shows no sign of abating. Investor sentiment is positive on these names as they prepare to report their fourth-quarter earnings in the coming week, with analysts expecting a huge profit surge.
Samsung is seen reporting a 140% jump in fourth-quarter operating profit, according to LSEG estimates. Meanwhile, Micron’s earnings per share are expected to rise more than 400% year-on-year in the December quarter.
Micron and ASML stocks have rallied this year so far.
The rally in memory chip stocks has fed through to other parts of the supply chain as investors expect strong AI demand seen in 2025 to continue this year.
Intel shares are up nearly 7%, while Taiwan Semiconductor Manufacturing Co. — the world’s biggest semiconductor maker — has risen nearly 10%. Both companies, which manufacture various types of semiconductors, are seen benefiting from a continued AI boom.
Meanwhile, ASML, the Dutch firm that designs critical machines required to manufacture the most advanced chips in the world, has seen its shares rise nearly 14% this year.
Bernstein on Sunday raised its price target for ASML’s stock from 800 euros ($937) to 1,300 euros, implying a roughly 24% rise from Tuesday’s trading price.
“ASML stands to benefit enormously from the wave of capacity expansion planned for 2026 and 2027,” with memory chips, Bernstein analysts wrote in their note on Sunday. The analysts added that ASML will benefit “from the upcoming DRAM super cycle.”
Analysts expect memory makers like Samsung and other manufacturers to increase their production capacity for memory, which will benefit ASML because its tools are needed to make these more advanced memory chips.
“Recent comments from SK Hynix pointing to a potential HBM supercycle have reinforced the idea that this is not just a short-term bounce, but a more structural shift linked to the ongoing build-out of AI infrastructure,” Barringer said.
“That has helped improve sentiment across the sector, especially for companies with direct exposure to AI-driven memory demand.”
