The Financial Post reports in its Wednesday, Feb. 11, edition that rising memory chip prices have created a significant divide between winners and losers in the stock market, with no end in sight for investors.
A Bloomberg dispatch to the Post reports that companies from Nintendo to big PC brands and Apple suppliers are seeing shares slump on profitability concerns. Memory producers are reaching new heights as money managers and analysts evaluate which companies can effectively navigate the supply squeeze through strategies like securing supplies, increasing prices, or redesigning to use less memory.
A Bloomberg gauge of global consumer electronics makers is down 10 per cent since the end of September while a basket of memory makers including Samsung has surged about 160 per cent. The question now is how much is priced in.
Fidelity International's Vivian Pai believes industry tightness is likely to persist," possibly through the rest of the year.
Honda noted Tuesday that supply risks are emerging for memory components.
Investors are hearing the alarm bells. Shares of Qualcomm fell more than 8 per cent last Thursday after the smartphone processor maker signalled memory constraints will limit phone production.
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