Memory chips have quietly become the most important commodities in the global economy.

DRAM (Dynamic Random Access Memory) is considered the workhorse of the digital world. It functions as the operating memory when a device is turned on, and this memory is lost when a device is switched off. These chips are used in almost all electronic devices. They play a critical role and sit at the heart of everything from AI servers, cars, smartphones, laptops and more.

The Nvidia type of chips – GPUs (Graphics Processing Units) – are used for computational purposes but are also heavily reliant on DRAM chips.

Many will be aware of the rise of semiconductors and the rapid ascent of Nvidia but few will be aware of the changes ripping through another part of the semiconductor industry: DRAM chips, which have a very direct effect on all of our everyday lives. When Covid disrupted supply chains, we saw all sorts of issues from price increases to availability of goods. Remember when the price of second hand cars were trading at levels close to new cars as the old cars had the necessary chips, while new ones had to go without.



The price of these memory chips has exploded in recent months, helping explain why the Korean Stock Exchange has had such a good run with Samsung and SK Hynix making up circa 35% of the index.

Today’s tight memory market raises a fascinating macro question: Is this inflationary fuel for the global economy or are we at the early stages of a deflationary unwind?

The inflation case: scarcity breeds pricing powerThe inflation case: scarcity breeds pricing power

The deflation counterargument: when scarcity and price choke growthThe deflation counterargument: when scarcity and price choke growth

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