Investment Rating - The report assigns a "Outperform" rating to the storage industry, driven by the expansion of AI and data, which is pushing the storage sector into a new cycle with increasing prices and demand for new technologies like HBM [2]. Core Insights - The storage market is experiencing significant growth due to the increasing demand for storage technology across various sectors of the digital economy, particularly driven by AI applications. The demand for AI edge storage is growing at a much faster rate than other segments, becoming a key driver for global storage market expansion [7][14]. - The report highlights that the prices of storage products have already seen substantial increases in 2025 and are expected to rise further in 2026, driven by both AI servers and general server demands. The supply-demand dynamics are complex, with structural capacity constraints and competition across multiple dimensions [7][30]. - The report emphasizes the importance of domestic storage manufacturers in China, such as Changxin Memory and Yangtze Memory Technologies, which are making significant strides in production and technology, potentially reshaping the competitive landscape [7][67]. Summary by Sections Market Overview - The global data generation is projected to reach 213.56ZB by 2025 and exceed 527.47ZB by 2029, with China's data generation expected to grow from 51.78ZB in 2025 to 136.12ZB by 2029, reflecting a CAGR of 26.9% [14][17]. - The capital expenditure of major cloud service providers (CSPs) is expected to increase significantly, with a projected total exceeding $600 billion in 2026, marking a year-on-year growth of approximately 40% [23][26]. Supply Side Dynamics - The supply of storage components is constrained, with a shift in capital expenditure focus towards advanced process technologies and high-value products rather than mere capacity expansion. This is expected to maintain a supply-demand imbalance throughout 2026 [67][70]. - The report notes that HBM technology is becoming increasingly competitive, with significant growth expected in the high-performance memory segment, particularly for AI applications [73][79]. Demand Side Dynamics - The demand for AI storage is rapidly increasing, with traditional HDDs facing supply shortages due to the lack of planned expansions by major manufacturers. This has led to a shift towards high-performance SSDs, particularly QLC SSDs, which are expected to see significant growth in 2026 [83][84]. - High-end DRAM remains a standard for AI applications, with a notable shift towards LPDDR5X memory, which is projected to see a demand increase of 169% in 2026 [86][91]. Investment Opportunities - The report suggests focusing on specific segments within the storage industry that are likely to benefit from the current market dynamics, including distributors and module manufacturers, niche market IC design companies, and domestic semiconductor supply chains [4].

Core Viewpoint - The recent price surge in the global storage industry has positively impacted the performance and stock prices of domestic storage manufacturers, with three companies in the A-share market exceeding a market capitalization of 100 billion yuan [1]. Company Performance - Three major storage companies in the A-share market are: - **Lanqi Technology**: Market cap of 138.8 billion yuan, current price at 121.17 yuan, with a 60-day increase of 34.59% and a year-to-date increase of 79.61% [2]. - **Zhaoyi Innovation**: Market cap of 137.3 billion yuan, current price at 205.78 yuan, with a 60-day increase of 70.81% and a year-to-date increase of 93.22% [2]. - **Jiangbolong**: Market cap of 122 billion yuan, current price at 291.07 yuan, with a year-to-date increase of 238.45% [2][3]. Jiangbolong's Growth Story - Jiangbolong's founder, Cai Huabo, started from humble beginnings in Huaqiangbei and transformed the company into a major player in the storage industry through self-research, acquisitions, and international expansion [6]. - The company has shifted from being a backend player in the supply chain to focusing on higher technical capabilities and diverse business models to gain more global market influence [3][11]. Financial Performance - Jiangbolong reported a significant increase in revenue and profit in Q3 2023, achieving 6.539 billion yuan in revenue, a year-on-year increase of 54.6%, and a net profit of 698 million yuan, a staggering increase of 1994.42% [18][19]. - The company’s stock price has risen sharply, from approximately 95 yuan per share in September to a peak of 331.5 yuan, marking an increase of over 248.95% [21]. Market Trends - The storage industry is experiencing a new cycle driven by AI, with a notable shift in demand towards high bandwidth memory (HBM) and a reduction in capital expenditure for NAND Flash and DRAM products [18][23]. - Jiangbolong is actively expanding its business through acquisitions and enhancing its production capabilities, including a recent acquisition of 81% of SMART Brazil to manufacture general storage products [14][24]. Strategic Initiatives - Jiangbolong is focusing on self-research in main control chips, which are crucial for storage performance, and has launched multiple series of self-developed chips [16]. - The company is adopting new operational models such as TCM (Technology Contract Manufacturing) and PTM (Product Technology Manufacturing) to enhance its service offerings and meet the demands of core clients [23][24].