Micron Technology(US:MU) 2 1 Shi Ji Jing Ji Bao Dao·2025-12-04 14:06Core Insights - The storage industry is experiencing a significant price surge, with DRAM and NAND prices expected to rise substantially in the coming year, driven by increased demand from AI applications and a shift in production focus by major manufacturers [1][3][5]. Group 1: Price Increases and Market Dynamics - SK Hynix announced a contract price increase of up to 30% for DRAM and NAND in Q4, while SanDisk raised NAND flash contract prices by approximately 50%, marking the largest single price hike in this round [1][3]. - The price of DRAM is projected to increase by 171.8% year-on-year by Q3 2025, significantly outpacing the price increases of precious metals like silver and gold [1][3]. - The rapid price changes have led to a volatile market environment, particularly in Shenzhen's Huaqiangbei electronics market, where prices fluctuate daily [4][6]. Group 2: Supply Chain and Production Shifts - Major manufacturers, including Samsung, SK Hynix, and Micron, are reallocating production capacity from traditional DRAM products like LPDDR4 to higher-value products such as HBM and DDR5, resulting in a tightening supply of LPDDR4 [5][9]. - By 2026, the supply share of LPDDR4 is expected to drop to 26%, while LPDDR5's share will rise to 73%, indicating a significant shift in the product mix [5][6]. Group 3: Impact on Consumer Electronics - The rising costs of storage chips are expected to lead to higher prices for consumer electronics, including smartphones and PCs, with some brands already adjusting retail prices in response to increased component costs [6][7]. - The anticipated increase in smartphone costs and the competition for LPDDR5 supply between mobile and AI demands will further exacerbate cost pressures in the consumer electronics sector [6][7]. Group 4: Future Demand Projections - Demand for DRAM and NAND Flash in general and AI servers is projected to grow significantly, with DRAM demand for general servers expected to increase by 20% and NAND Flash by 19% in 2026 [7][8]. - The overall revenue for the DRAM market is forecasted to reach $300.6 billion in 2026, reflecting an 85% year-on-year increase, while the NAND Flash market is expected to reach $110.5 billion, a 58% increase [7][8]. Group 5: Capital Expenditure and Production Capacity - In response to rising prices, major storage manufacturers are increasing capital expenditures, with projections of over 80% growth in 2025 driven by AI and HBM demands [8][9]. - Despite the increase in capital spending, the effective supply output from new facilities is expected to be limited until 2027, indicating ongoing supply constraints in the market [9].