Micron Technology(US:MU) Hu Xiu·2025-10-26 02:04Core Viewpoint - The storage chip market is experiencing a significant price surge, driven by the demand from AI applications, leading to a "storage super cycle" as predicted by Morgan Stanley [3][5][34]. Group 1: Market Dynamics - As of October 21, 2023, the average spot price of DRAM:DDR4 has increased by 484%, reaching $18.63 [1]. - The last cycle ended in September 2023, and a new upward cycle has begun due to strong demand for large model training [5][6]. - The storage chip industry is characterized by cyclical demand and supply, typically alternating every 3-4 years [3][6]. Group 2: Beneficiaries of the Cycle - The primary beneficiaries of the current cycle are HBM (High Bandwidth Memory) and DRAM, as they are crucial for AI performance [7][10]. - HBM is a high-end variant of DRAM, offering significantly higher performance and price, with projections indicating a market size of $50-60 billion by 2026 and $100 billion by 2030 [8][9]. - Major players in the DRAM market, including Micron, Samsung, and SK Hynix, control over 90% of the market share [10]. Group 3: Geopolitical Implications - The rising prices of storage chips are beneficial for the U.S. and South Korea but pose challenges for China, which relies on these technologies for AI development [9][10]. - U.S. pressure on South Korea to restrict HBM exports to China could hinder China's progress in AI model training [10][12]. Group 4: Domestic Market Developments - China is accelerating efforts to develop domestic storage chip capabilities, with policies favoring local manufacturers [13][14]. - Companies like Shannon Semiconductor and GigaDevice are making strides in the enterprise DRAM sector, while consumer-grade DRAM remains competitive [16][17]. Group 5: Valuation Insights - A comparison of valuations shows that A-share storage companies have significantly higher P/E ratios than their U.S. counterparts, indicating a premium that may not be justified by performance [21][22]. - Despite rising prices, many domestic firms have not yet seen corresponding profit increases, suggesting that current stock price increases are driven more by market sentiment than by actual performance [23][24]. Group 6: Future Outlook - Micron's strong performance and optimistic guidance for future earnings highlight the potential for continued growth in the storage sector [28][30]. - The ongoing demand for AI infrastructure and the potential for a prolonged storage cycle could lead to further valuation adjustments for companies in this space [32][33].