2 hours ago
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Adam Levy, The Motley Fool
Sun, May 17, 2026 astatine 1:08 PM CDT 6 min read
Demand for representation chips has skyrocketed implicit the past twelvemonth arsenic large tech companies upped their spending connected artificial quality (AI) information centers. That's been a immense boon for some Micron Technology (NASDAQ: MU) and Sandisk (NASDAQ: SNDK), which person benefited from tremendous pricing power. Earnings astatine some companies person soared, arsenic person their banal prices. Micron shares are up implicit 700% successful the past 12 months, and Sandisk banal is up a whopping 3,200%.
But investors anxious to hop connected the bandwagon request to beryllium alert of 2 different companies that person a immense power connected some Micron's and Sandisk's earnings. Since they're overseas companies, their stocks are mostly little accessible to American investors. But luckily, there's a mode for investors to summation entree to them and hedge the hazard they airs to American representation leaders.
Will AI make the world's archetypal trillionaire? Our squad conscionable released a study connected a little-known company, called an "Indispensable Monopoly," providing the captious exertion Nvidia and Intel some need.
The overseas representation giants controlling the marketplace
Micron and Sandisk presently payment from a planetary proviso shortage successful representation chips. For the astir part, representation chips are precise commodity-like. That is, a representation spot from 1 institution tin service conscionable arsenic good arsenic 1 from different manufacturer. As such, each representation chipmaker tin person an outsize interaction connected the full manufacture by rapidly expanding its accumulation capabilities.
So far, each of the representation chipmakers person exercised caution successful expanding their production. Nobody wants to get caught with costly accumulation facilities without the request to utilize them. At the aforesaid time, nary of them wants to permission the accidental to merchantability much chips connected the table. It's a cautious balancing act, and 1 that creates tremendous boom-and-bust net cycles passim the industry.
It's besides wherefore investors can't disregard the power of Korean chipmakers Samsung Electronics (OTC: SSNLF) and SK Hynix (KOSE: A000660). The 2 combined to relationship for much than two-thirds of the planetary DRAM spot marketplace and astir one-half the NAND spot market. They besides predominate the invaluable high-bandwidth representation (HBM) spot market, with astir 80% of sales. HBM chips are stacks of DRAM chips that are designed specifically to connect to GPUs and different AI accelerator chips for AI grooming and inference.
As such, the 2 companies grounds a tremendous power implicit the full market. If they physique retired capableness faster than the competition, they could payment from much spot sales, but they could propulsion prices little crossed the full industry. Those without capableness volition beryllium near behind.
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