I. Core Industry Definitions

Storage chips facilitate data reading, writing, circulation, and retention. As fundamental electronic components, they are widely used in fields such as artificial intelligence, computing infrastructure, consumer electronics, servers, and smart terminals, representing a core semiconductor sector with rigid demand.

II. Two Major Categories

1. DRAM

DRAM is a type of volatile memory that offers fast read and write speeds but loses data automatically when power is cut off.

Its industry applications primarily focus on high-speed data scheduling and real-time computing.

HBM is a high-bandwidth product built on the DRAM architecture, utilizing 3D stacking packaging technology (not a replacement for DRAM iterations). With ultra-high bandwidth, it has become a core standard for AI computing servers.

2. NAND

NAND is a type of non-volatile memory that retains data even after power is cut off. It serves as a long-term data storage medium with a fixed write lifespan and large capacity, commonly used in scenarios such as data retention, system preloading, and solid-state storage.

How to distinguish between the two?

DRAM excels in speed and handles high-speed computing scheduling; NAND focuses on capacity and is responsible for retaining massive amounts of data. Together, they collaborate to complete all data circulation within devices.

III. Fundamental Industry Characteristics

1. Strong Cyclicality

The industry's trajectory is generally determined by global supply and demand dynamics, with a relatively clear historical pattern of ups and downs.

When there is overcapacity, prices decline and reach a low point; when supply is tight, prices rise and a prosperous cycle ensues.

2. Capital-Intensive and High Barriers to Entry

Significant investments are required for wafer fabrication plant construction, production line setup, and technological research and development, with long lead times for production. As a result, the supply side has low flexibility for adjustments in the short term.

3. Continuous Technological Evolution

Currently, the industry is advancing toward smaller process nodes, higher stacking layers, lower power consumption, and higher transmission rates. Technological prowess directly determines market influence.

IV. Global Industry Landscape

1. Leading overseas manufacturers have long monopolized the global mainstream production capacity, core processes, and pricing power, holding the vast majority of market share.

2. The domestic storage industry is in the stage of technological breakthrough and capacity expansion, with import substitution serving as the core development theme in the medium to long term.

3. The industrial chain is clearly stratified: the upstream consists of semiconductor equipment and basic raw materials; the midstream involves storage chip wafer manufacturing; and the downstream includes packaging and testing, module processing, and terminal applications.

V. Industry Cycle Timeline

2023 marks the absolute bottom of the current storage industry downturn cycle;

From 2024 onward, the industry is expected to gradually bottom out and rebound, with prices recovering;

2025-2026 will see a comprehensive phase of high prosperity and upward momentum.

VI. Core Drivers of the Current Industry Upturn

Recently, the storage sector has performed exceptionally well in the market, becoming a focal point of public attention, largely due to the following reasons.

1. Complete Restructuring of Demand Structure

In the past, demand was primarily driven by consumer electronics such as smartphones and computers. Today, the explosion of commercial demand for AI large model training, computing cluster construction, and cloud data centers has significantly increased the amount of storage per device, creating substantial new rigid demand.

2. Proactive Global Supply Contraction

Overseas major manufacturers continue to control production to stabilize prices, prioritizing capacity for AI-specific high-end storage products while reducing capacity allocation for general-purpose storage. As a result, both spot and long-term agreement (LTA) supplies (stable sources locked in through long-term contracts between buyers and sellers, specifying price, quantity, and delivery time) are generally tight in the market.

3. Gradual Weakening of Cyclical Attributes

Commercial computing-related storage demand exhibits strong stability and sustainability, mitigating the cyclical fluctuations caused by consumer electronics.

4. Support from China's Industrial Policies

China has continuously increased its support for the underlying hardware of semiconductors, assisting local storage companies in technological breakthroughs, capacity expansion, and market penetration.

VII. Industry Development Trends

1. Short-term: The industry will maintain a high-prosperity situation (prosperous state).

2. Medium-term: Domestic storage capacity in China will be released in an orderly manner, with the market share of domestically produced products continuously increasing and the upstream-downstream supporting industrial chain continuously improving.

3. Long-term: The industry as a whole will upgrade toward high bandwidth, large capacity, automotive-grade standards, and low power consumption, deeply integrating with emerging sectors such as artificial intelligence, smart vehicles, and big data.