For the first time, memory chips are more expensive than oil.

VHO - Thanks to the artificial intelligence (AI) craze, the combined market capitalization of the three largest global memory chip manufacturers has for the first time surpassed that of the three richest oil and gas corporations in the world. Memory chips are becoming the "new black gold" of the digital economy.

In May, the three largest memory chip manufacturers in the world – Samsung Electronics, SK Hynix, and Micron – all joined the "club" of companies valued at $1 trillion. (Photo: Aju Press)

Over the past week, the global financial markets witnessed an unprecedented turning point, with the combined market capitalization of the three leading memory chip manufacturers – Micron (USA), Samsung Electronics, and SK Hynix (South Korea) – surpassing, for the first time, the three largest oil and gas corporations in the world: Saudi Aramco, Exxon Mobil, and Chevron.

Specifically, this figure is approximately 22% higher, marking a landmark shift in how assets are valued.

This symbolic shift is driven by the thirst for data to fuel the artificial intelligence (AI) revolution. Modern AI systems require enormous amounts of memory to train and operate their models, causing demand for memory chips to increase so rapidly that it far exceeds supply.

Besides the three "giants" mentioned above, in the flash chip segment, Sandisk (USA) also saw its market capitalization almost triple in just a few months, reaching a level equivalent to that of PetroChina (China).

Interestingly, despite the recent surge and investor concerns about a correction cycle, the nature of the memory chip industry is fundamentally changing. Like oil, memory chips have long been considered a basic commodity with boom and bust cycles driven by oversupply.

However, the wave of AI has disrupted the old rules. Manufacturers are beginning to require customers to sign long-term supply contracts, something very rare in the industry's history. For example, Micron has secured its first 5-year contract, while Sandisk has secured output for more than a third of its production capacity through long-term contracts with 5 major customers.

Behind this trend are the wealthiest tech giants like Microsoft, Google, and Amazon. They are willing to pay higher prices to secure supply because a shortage of memory chips is far more dangerous than paying a high price. According to estimates by analyst Tim Arcuri (UBS bank), long-term contracts could account for up to 30% of total DRAM chip shipments next year.

Thanks to this stability, the companies' profits skyrocketed: in just one year, Micron's adjusted earnings per share increased from $1.56 to $12.20.

Notably, despite its market capitalization surpassing $1 trillion, Micron's stock is still trading at less than 10 times projected earnings, placing it in the bottom 10% of the S&P 500 index. Samsung and SK Hynix shares are even cheaper, at around 6-7 times, far below the PHLX semiconductor index's average of 26 times.

Thus, the story is not just about a speculative price surge, but a fundamental shift in the business model, elevating memory chips to the status of a "strategic resource" similar to oil in the digital age.

Source: https://baovanhoa.vn/nhip-song-so/lan-dau-tien-chip-nho-dat-gia-hon-dau-mo-233045.html