Investment Rating - The report suggests a positive outlook for the storage industry, indicating a historical opportunity for domestic storage manufacturers due to supply contraction and technological upgrades [10]. Core Insights - Consumer storage products are expected to see price increases, potentially leading the storage market into a new prosperity cycle [5]. - The server market is poised to benefit first from the AI industry, with demand from supply chain manufacturers likely to rise as edge AI applications materialize [6]. - The report emphasizes the importance of monitoring channel inventory and price changes, given the cyclical nature of the storage industry [7]. Summary by Sections Supply and Demand Dynamics - Overseas manufacturers announced a 10%-15% reduction in low-end production capacity by the end of 2024, with channel inventory gradually normalizing since 2025 [8]. - High-end application areas remain in short supply, while internet companies continue to expand production, sustaining demand [8]. - The price of storage chips has seen a narrowing decline since Q1 2025, with some low-end categories already showing signs of price increases [8]. AI and Market Growth - AI server shipments are expected to account for over 14% of global server shipments in 2024, driving a nearly 70% increase in overall server market value [8]. - The penetration rate of DDR5 is projected to reach over 70% in 2024, significantly benefiting the demand for memory interface chips and related components [8]. Investment Recommendations - For storage modules, the report recommends focusing on companies like Demingli and Jiangbolong in enterprise storage, and Tianshan Electronics for module business progress [11]. - In the storage chip sector, it suggests monitoring domestic leaders like Zhaoyi Innovation and Beijing Junzheng, as well as Puran's trend towards high-end terminal products [12]. - For memory interface and supporting chips, attention is drawn to opportunities in companies like Lanke Technology and Jucheng Shares amid the storage industry’s technological transformation [12]. Market Trends and Projections - The global storage market is projected to reach approximately $172 billion in 2024, with a CAGR of about 9.5% expected to grow to $354.9 billion by 2032 [19]. - The Chinese storage market is anticipated to approach $77 billion in 2024, accounting for about 45% of the global market [19]. - The report highlights that the domestic storage manufacturers are likely to accelerate their growth due to the ongoing domestic demand for high-end products as overseas competitors withdraw from the low-end market [14].