Artificial intelligence algorithms, such as Gemini and ChatGPT, need a large memory storage called the key-value (KV) cache for long conversations. This is especially true with the rise of agentic AI. Memory usage is growing rapidly, creating a new "memory wall."
Software companies are looking for ways to reduce memory use. However, supply does not meet demand. Buyers are signing multi-year contracts at prices that are many times higher than last year. Downstream industries, such as smartphone makers, must actively seek survival. Investors should be less concerned about arguments that the market has already peaked despite the record high profit margin.
