The memory market has been scorching hot, and one new exchange-traded fund (ETF) dedicated to the sector that was introduced on April 2 has already more than doubled its value.
That ETF is the DRAM – Roundhill Memory ETF (NYSEMKT: DRAM), which is the first-ever memory ETF
The question, though, is whether the ETF is still a buy after its strong performance in such a short period of time. The ETF’s holdings are largely dominated by the big three DRAM makers: Micron Technology (NASDAQ: MU), SK Hynix, and Samsung. Together, the three stocks make up more than 73% of the fund’s portfolio.
The DRAM market has seen soaring prices, as demand for high-bandwidth memory (HBM), a special form of DRAM that is packaged with graphics processing units (GPUs) and other AI chips, has been surging. The entire DRAM market is supply-constrained, which is only exacerbated by HBM requiring upwards of three times the wafer capacity of ordinary DRAM. The supply demand dynamics of the DRAM market have led the big three players to see their revenue skyrocket and gross margins balloon.