Storage reconsidered: How long can the price increases last?
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The main driving force behind the storage market comes from the price increase of product orders.
Based on the information we currently know and have researched, this wave of price increases is likely to continue, and is expected to last until...
From the perspective of core targets, the main beneficiaries are...and...
I. What happened? Storage prices continue to rise
Driven bythe strong demand for memory chips from AI data centers, TrendForce originally believed that Q4 storage prices would move into a period of consolidation. However, the DRAM & NAND price index showed a significant rebound in 2025 Q3, the production cutback effects of industry leaders gradually emerged, and there was a surge of rush orders from large cloud computing companies on the demand side, resulting in signs of a price spike. Based on the continued growth of AI infrastructure demand, it is expected that storage prices will maintain their upward trend in Q4 and continue to rise until next summer.
Previously, in ourVIP article at the end of September "Why did the storage sector surge 5%? The industrial logic shift behind the price hikes", we mentioned——
In the AI era, inference has become the core of value. "Storage replacing computation" has become a technological innovation. By shifting vector data in AI inference from expensive DRAM and HBM video memories to large-capacity, high cost-performance SSD media, and enabling a strategic expansion of the storage layer from memory to SSD, this is the most essential driving force and industrial logic of the current market. The core value lies in sacrificing a small amount of latency, but gaining 8-16 times storage capacity and a significant price advantage, thereby increasing the throughput of large model inference, greatly optimizing end-to-end inference costs, and providing a feasible path for the large-scale rollout of AI data centers next year.
Judging from the performance of capital markets in the US, South Korea, Japan, the main beneficiaries of this sector's rally are traditional storage manufacturers and module makers.
II. Why is it important? Sudden industry transformation
Overseas giantssuch as SanDisk, Samsung, SK Hynix have posted astonishing share price performance, reflecting the market's fevered expectations for the logic behind the price increases. The core driving force of this craze comes from above-expected nearline enterprise SSD (NL eSSD) orders, leading the industry into a new round of price uptrend.
Morgan Stanley points out that for just four primary customers,NL eSSD order volume has already reached around 200EB, this doesn't even include about 150EB of AI-related demand, far exceeding the previously estimated 90EB for 2026, by a factor of 2. Morgan Stanley expects composite flash memory prices to rise another 15-20% in the first half of 2026.
Withthe shift of AI models from training to inference, the requirements for data read speed and latency have grown, making the structural importance of NAND increasingly prominent. The underestimated elasticity of NAND may surpass that of HBM.
Morgan Stanley believes that, compared to the commonly-watchedDRAM memory and mechanical hard drives, the flash memory market—due to its sharply reversed supply-demand pattern—shows much greater upside potential.
Source: Morgan Stanley
AI task processing is shifting from simple text interaction to image and video, with massive increases in data capacity. While HBM performs spectacularly, its high cost and limited supply severely restrict large-scale deployment. On the other hand, SSDs offer low cost and large capacity. "Storage replacing computation" as a breakthrough technological paradigm is maturing, driving CSP demand for SSD products. Under the "storage replacing computation" paradigm, SSDs are no longer just data storage carriers, but deeply involved core components of the AI inference process. By handling warm data offloaded from HBM and DRAM such as KV Cache, conversation histories, and RAG knowledge bases, SSDs effectively reduce reliance on high-cost HBM and significantly reduce total cost of ownership (TCO).
III. What to watch? The sustainability of price increases and the game of capacity expansion
Morgan Stanley believes that Kioxia and SanDisk benefit the most due to their highly correlated businesses. For example, Kioxia's advancedBiCS-8 technology puts it in a favorable position in the eSSD market, likely to see strong growth. Based on FY2027 projected earnings, the P/E ratio is only 7.2x. In addition, Samsung and SK Hynix, as storage market giants, will benefit from the strengthening of the entire storage commodity cycle.
In China, Tianfeng Securities believes that module manufacturers, storage chipmakers, and storage distribution and testing/packaging are the three most benefited segments, with leading companies benefiting from the industry's boom.
From our research and communication, due to the past few industry cycles with the experience that"capacity expansion marks the top", leading companies such as SanDisk are very cautious about capacity expansion and unwilling to pour large capex to meet peak market demand, which will further drive up the amplitude and duration of price increases.
According to historical data, for Micron, SK Hynix, and Western Digital,from 2012 to now, whenever original manufacturers' gross margins reach above 35%, the probability of increased capex in the corresponding quarter also rises.
If capacity expansion is assumed, then as storage chips move toward higher density, performance requirements for etching, thin-film, and bonding processes rise; the importance of etching equipment, thin-film equipment, and bonding equipment is also increasing. In addition, with the upcoming global storage boom cycle and strengthened willingness to expand among original storage makers, the imminent IPO of domestic storage companies will strongly stimulate demand in the related supply chain.
Risk Warning and DisclaimerThe market involves risk, and investment should be cautious. This article does not constitute personal investment advice, nor does it consider the special investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article fit their specific circumstances. Investment according to this article is at your own risk. ```