2026-01-20 08:45Investment Rating - The report indicates a cautious outlook for the storage industry due to tariff impacts and market uncertainties, suggesting a "Hold" rating for investments in this sector [7][20][36]. Core Insights - Tariffs have become a dominant variable affecting the entire storage industry chain, with the U.S. imposing tariffs as high as 125%, impacting prices of DRAM modules and SSDs [7]. - Major manufacturers like Micron and SK Hynix are adjusting strategies by raising prices and shifting focus towards high-end products such as HBM and DDR5, anticipating a significant increase in HBM demand [7][36]. - The market is experiencing short-term price volatility due to tariffs and supply-demand tensions, with SSD and DRAM prices fluctuating as demand remains uncertain [7][36]. - The rise of AI applications is driving demand for high-performance memory, despite an overall weak smartphone market [7][36]. - Various semiconductor policies are being implemented across the U.S., South Korea, and China, affecting the industry's operational landscape [7]. Summary by Sections Macroeconomic Overview - In April, China's manufacturing PMI index was at 49%, indicating a decline in manufacturing activity, while the U.S. PMI was at 48.7%, reflecting ongoing contraction in the manufacturing sector [8][9][11]. Upstream Market Dynamics - Morgan Stanley predicts a three-phase impact from tariffs on the storage industry, with the first phase leading to price increases due to stockpiling [20][22]. - The current phase is characterized by short-term price increases that are not sustainable, with economic recession risks looming [20][22]. - Major manufacturers are reducing production of older process technologies, focusing on advanced products to enhance profitability [26][30]. Passive Components - Major passive component manufacturers are raising prices due to strong demand and rising costs, with expectations of double-digit percentage increases [38]. Module Manufacturer Dynamics - Companies like Nanya and Adata are seeing revenue growth driven by AI applications, with expectations of improving DRAM contract prices in the upcoming quarters [39][40]. - The overall market is experiencing a price increase trend as supply-demand dynamics stabilize [43]. Domestic Spot Market - The storage market in April was characterized by tariffs, price increases, stockpiling, and a cautious market outlook, with significant fluctuations in SSD and DRAM prices [49][51]. - The market is expected to stabilize once tariff policies are fully established, allowing for a return to normal supply-demand dynamics [66].