The semiconductor industry, particularly the memory market, is currently experiencing an extraordinary expansion that can only be described as "explosive growth." Words like "booming" simply don't do justice to this phenomenon. A single glance at the charts is enough to awe anyone with its sheer scale. Figure 1 shows the three-month moving average shipments of various semiconductor categories based on World Semiconductor Trade Statistics (WSTS) data from 1991 to May 2026. Over the past 30 years, despite fluctuations in the economic environment, the four main categories—microdevices, memory, logic devices, and analog devices—have generally shown a steady upward trend. This represents a "normal development trajectory" for the semiconductor industry.

Figure 1. Three-month moving average shipment value of semiconductor products by type (as of April 2026) Source: Author based on WSTS data

However, since around 2024, logic circuits, especially the recently emerging memory, have experienced near-vertical growth, completely overturning conventional wisdom. The growth in memory, in particular, has been astonishing, almost breaking through the peak of the chart. This growth rate is so rapid that the growth history accumulated over the past 30 years seems like just a warm-up.

... Based on my years of close observation of the semiconductor market, I can say with certainty that the memory market has never experienced such steep growth. This is a historic anomaly, shaking the very fabric of the semiconductor industry. It grew approximately tenfold in 10 years, an astonishing annual growth rate of 285%. Figure 2 illustrates this explosive growth, focusing on 2016 and beyond. In 2016, monthly shipments of MOS memory were approximately $5.6 billion. After a brief boom during the 2017-2018 "memory bubble," shipments plummeted to just $5.8 billion by the time of the economic recession in early 2023. This marks the lowest point of the semiconductor industry's downturn.

Figure 2. Three-month moving average of semiconductor product shipments (by type) (April 2016 to April 2026) Source: Author based on WSTS data

However, the subsequent recovery, or rather the surge, has been remarkable. By May 2026, monthly storage shipments had soared to $63.3 billion. This represents an increase of more than 11 times in just ten years compared to 2016 levels.

... Compared to the low point in early 2023, it has grown approximately 10.7 times in just a few years. Similarly, Figure 2 shows that the logic business, including NVIDIA GPUs, has also grown from $13.3 billion to $31.6 billion, clearly demonstrating the "NVIDIA GPU effect" and the "AI effect." However, even the growth of the logic business appears relatively moderate compared to the explosive growth of the storage business. This anomaly is even more pronounced in terms of growth rates. Figure 3 shows the year-on-year growth rate for the same data, with storage recently achieving a record high of 285% year-on-year growth. Figure 3. Three-month moving average year-on-year growth rate of semiconductor shipments (as of April 2026) Source: Compiled by the author based on WSTS data. For reference, even at the peak of the last "memory bubble" (around 2017), the annual growth rate reached around 60%. In comparison, you can see how astonishing the current growth rate is. Observing the other three categories in Figure 3, even logic circuits only account for about 40%, while microcontrollers and analog circuits only account for about 14%–19%. In other words, only memory growth has truly reached "another level." DRAM and NAND are experiencing explosive growth. Looking at the memory market, the main drivers of its explosive growth come from two major memory products: DRAM and NAND flash memory (hereinafter referred to as NAND). Figure 4 shows a quarterly overview of the global DRAM and NAND market based on TrendForce data. Figure 4: Global DRAM and NAND Market (TrendForce's forecast for Q2 2026) Source: Created by the author based on TrendForce's DataTrack data. In early 2023, amidst a semiconductor industry downturn, DRAM prices plummeted to a low of $9.7 billion, and NAND prices fell to $8.7 billion. This was a dark period, with all memory manufacturers suffering losses and forced to cut production. However, the DRAM market is projected to jump to $145 billion and the NAND market to $81 billion by the second quarter of 2026. This represents a roughly 15-fold increase in DRAM and a roughly 9-fold increase in NAND compared to their lows in early 2023. Combined, the quarterly total reaches $226 billion, and the annual total exceeds $900 billion – a seemingly unbelievable figure. Once considered a “cheap standard” or “commodity,” memory is now poised to wrest leadership from microcomputers such as logic and MPUs from the semiconductor industry. The reason? An unusual surge in memory and wafer prices. Why has the memory market expanded to such a scale? The key is that this explosive growth is not solely due to increased shipments; the biggest factor is the unusual surge in memory prices themselves. Figure 5 shows the trends in DRAM (DDR5 16Gb 2Gx8) spot prices and NAND (1Tb TLC wafer) wafer prices. At the beginning of 2025, the DRAM spot price was only $4.70. Recently, the price surged to $46.00, an increase of approximately 10 times. NAND wafer prices also jumped from $2.40 to $25.00, similarly an increase of approximately 10 times. Figure 5: DRAM (DDR5 16Gb 2Gx8) and NAND (1Tb TLC wafer) spot prices surge. Source: Author based on TrendForce's DataTrack data. In other words, the main reason for the market size's tenfold growth is not a tenfold increase in shipments, but rather a nearly tenfold increase in "unit price." Even if storage sales volume remained unchanged, revenue would increase tenfold. This is the mechanism behind the explosive growth of the storage market. For storage manufacturers, this is an ideal environment. After all, prices can rise automatically without a significant increase in capital investment, thus significantly improving profit margins. As will be discussed later, the surge in storage manufacturers' stock prices is also due to the rapid profit growth resulting from this unusual price increase. The Reasons for the Price Surge So, why are storage prices soaring? This is because demand far exceeds supply, but tracing the root of this demand reveals that it is due to the staggering investments made by hyperscale data center operators. Figure 6 shows the capital expenditure trends of the four major hyperscale data center operators (Amazon, Google, Microsoft, and Meta). In 2015, the total capital expenditure of these four companies was only $21 billion. Even so, this was considered a "huge sum" at the time. Figure 6: Sources of Capital Expenditure for the Top 4 Hyperscale Data Center Operators: Compiled by the author based on company financial reports and TrendForce data. However, since OpenAI released ChatGPT in November 2022, the field of generative artificial intelligence has experienced a surge in popularity, and the capital investment curve has risen sharply accordingly. It is projected that by 2025, the total investment of these four companies will reach $355 billion, and by 2026, this figure is expected to reach a staggering $755 billion. This represents an unprecedented investment boom, with investment increasing approximately 36 times in just over a decade since 2015. $755 billion far exceeds 120 trillion yen. These four companies alone plan to invest the equivalent of Japan's national budget (general account) in data center and artificial intelligence infrastructure construction within a single year. This demonstrates just how extraordinary this situation is. Artificial intelligence data centers are like "black holes." The ultimate destination of this massive investment is artificial intelligence data centers. Figure 7 illustrates the current situation schematically. Figure 7: Why are DRAM and NAND flash memory prices soaring? As hyperscale data centers race to invest in AI data centers, the semiconductors essential for AI learning and inference—GPUs from companies like Nvidia, high-bandwidth memory (HBM) used in GPUs, and large-capacity SSDs equipped with NAND flash memory—are being sucked into the "black hole" of AI data centers one after another. Memory manufacturers prioritize the production of high-margin HBM and high-performance DRAM and NAND flash memory for data centers. This is a natural business decision. Consequently, production capacity has shifted to artificial intelligence, resulting in a significant reduction in capacity available for other applications. The industries most severely affected are DRAM and NAND flash memory used in digital consumer electronics such as PCs, smartphones, and game consoles. Storage for these products is severely scarce, reaching a point of "complete shortage." Due to limited supply, if demand is concentrated solely in AI data centers, storage for consumer electronics will inevitably be exhausted. This will lead to fierce competition for the limited supply, driving up prices. This is directly related to the unusually high storage prices mentioned earlier. In fact, PC and smartphone manufacturers have begun issuing SOS signals, stating that they cannot obtain the necessary storage, and soaring procurement costs are forcing them to pass these costs on to product prices. Ironically, under the shadow of the rise of artificial intelligence, the digital devices we use every day are becoming increasingly expensive and even scarcer. Semiconductor Market Prediction "Completely Wrong" In 2023, I made a forecast of the global semiconductor market's development trend until 2032, as shown in Figure 8. By analyzing the history of the semiconductor industry and combining the "PC effect," "Internet effect," "smartphone effect," and the upcoming "AI semiconductor effect," I predicted that the semiconductor market would grow at a rate of approximately "doubling every decade." This forecast projected that the market size would reach approximately $1.2 trillion by 2032. At the time, I thought this was a rather optimistic prediction. Figure 8: Global Semiconductor Market Forecast for 2023. Data Source: Based on WSTS data and author's forecast. However, this forecast turned out to be completely wrong. In fact, it was wrong because it was too conservative. See Figure 9. According to WSTS (World Semiconductor Statistics)'s Spring 2026 forecast, the global semiconductor market size will reach $630.5 billion in 2024, $795.6 billion in 2025, and surpass $1.5 trillion in 2026, reaching $1.5112 trillion. Furthermore, it is projected to grow rapidly to $1.9137 trillion by 2027, approaching $2 trillion. Figure 9: The global semiconductor market has expanded rapidly due to the booming development of artificial intelligence, and the forecast was seriously inaccurate. Source: The author made this based on WSTS data and WSTS Spring 2026 Semiconductor Forecast. In just a few years, the market size easily exceeded the author's previous forecast of $1.2 trillion by 2032. The 2032 forecast was achieved in 2026. This does not mean that the previous forecast was "overly optimistic", but rather that the disruptive power of the artificial intelligence boom has completely overturned all the previous conventions of the semiconductor industry. Figure 10 clearly shows that this rapid growth is driven by memory (including DRAM and NAND) and logic circuits (including GPUs). The memory market is expected to surpass $1 trillion by 2027, reflecting the explosive growth of DRAM+NAND mentioned above. The logic circuits market is also projected to exceed $500 billion. Figure 10: Rapid Growth in Memory (including DRAM and NAND) and Logic (including GPUs) Source: Created by the authors based on WSTS data and WSTS Spring 2026 Semiconductor Forecasts. On the other hand, the analog circuits and microsemiconductors sectors have remained almost flat. In other words, the overall semiconductor market growth is uneven; instead, only these two AI-related sectors are growing at an unprecedented rate, driving the overall market growth. This is an extremely distorted growth structure. How long will this boom last? Now, let's answer the question everyone is most concerned about: "How long will the booming development of artificial intelligence and the resulting growth last?" The key to understanding this is understanding the long history of the memory market. Figure 11 shows the annual growth rate of the memory market over nearly 35 years since 1991. This figure reflects the numerous ups and downs the semiconductor industry has experienced. Figure 11: Annual Growth Rate of the Memory Market. Source: Created by the author based on WSTS data and WSTS Spring 2026 Semiconductor Forecast. From the boom brought by the release of Windows 95 in 1995, to the IT bubble of 2000 and its subsequent burst, to the memory bubble of 2017-2018, the collapse of Lehman Brothers in 2008, and the boom brought by the COVID-19 pandemic since 2020, the semiconductor industry has experienced a rollercoaster of booms and busts. What's noteworthy here is not the height of a single peak, but the "duration" of sustained positive growth. A careful analysis of Figure 11 reveals a key fact: in any historical period, the longest period of sustained positive annual growth in the memory market is only five years. In the past 35 years, there has never been a period of six or seven consecutive years of positive growth. Why does the market tend to plateau after five years? Because the memory market is inherently influenced by the "silicon cycle," which includes a surge in demand, rising prices, increased investment in production by companies, oversupply, and a price crash. If the economy continues to prosper, companies will inevitably rush to invest in equipment, ultimately leading to oversupply and a price crash. This is the inherent operating mechanism of memory as a product. The current AI boom is expected to drive significant growth in the memory market, starting from a trough in 2023 and peaking in 2024. Historically, this boom should end no later than 2028, and may even peak as early as 2027. While some will inevitably say, "This time is different" or "AI is special," we must not forget that the same arguments have been made during every previous economic bubble. The higher the mountain, the deeper the valley. The history of the semiconductor industry also tells us another undeniable rule: "The higher the peak, the deeper the subsequent trough." If you look at Figure 11, this rule becomes obvious. The IT bubble reached a peak of over 50% annual growth in 2000, but then plummeted to a -49.5% abyss in 2001. Similarly, the memory bubble of 2017-2018 experienced a peak of over 60%, followed by a sharp drop of 33% in 2019. In this industry, the higher the peak of prosperity, the more severe and longer the subsequent recession tends to be. Let's examine the current AI boom. A 285% annual growth rate is an unprecedented peak, far exceeding any previous bubble. Its surge is so high that the peaks of the IT bubble and the memory bubble pale in comparison. Applying this principle, the conclusion is obvious. The trough that follows this unprecedented boom is likely to be deeper and more severe than any trough the semiconductor industry has ever experienced. We should prepare for an extremely severe economic recession expected to begin in 2027-2028, one that cannot be overcome with half-hearted efforts. Memory Manufacturer Stocks Soar and "Billionaires" Currently, memory manufacturers' stock prices are soaring across the board. This is entirely expected, as rising prices have led to a significant increase in their profits. A symbolic example is Kioxia. The company's stock price surge has made 600 investors, arguably "billionaires," realize over 1 billion yen in unrealized gains from their stock holdings. The entire industry is immersed in an unprecedented atmosphere of celebration. However, we need to remain calm. Stock prices are like a mirror, reflecting people's expectations for the future. When these expectations are too high, even a slight shortfall in reality can cause a stock price to collapse instantly. The higher the mountain, the deeper the valley. This principle applies to stock prices, not just market size. Every bubble burst in the past has resulted in this scenario: billionaires who became incredibly wealthy at the peak of the bubble were forced to drastically reduce their assets as the recession arrived. Now, in the midst of economic prosperity, it is the time to prepare for a recession. This prosperity will not last forever. History shows that positive growth in the memory market lasts at most five years, followed by a trough (at least superficially). The higher the peak, the deeper the trough. Therefore, I strongly urge companies currently enjoying prosperity: "While the prosperity continues, you should prepare for a recession."