Core Viewpoint - The article discusses the current surge in storage chip prices driven by the booming demand for AI, indicating the onset of a "storage super cycle" that could present significant investment opportunities in the semiconductor sector [4][5][12]. Group 1: Market Dynamics - As of October 21, 2023, the average spot price of DRAM:DDR4 has increased by 484%, reaching $18.63 [4]. - The storage chip industry operates in a cyclical manner, with demand and prices typically experiencing a clear "up to down" rotation every 3-4 years [6][10]. - The last cycle, triggered by the pandemic, ended in September 2023, but a new upturn has begun due to strong demand for large model training in AI [8][10]. Group 2: Key Beneficiaries - The primary beneficiaries of the current storage cycle are HBM (High Bandwidth Memory) and DRAM, as they are directly linked to processors and essential for AI applications [16][17]. - HBM is expected to see significant market growth, with projections estimating the market size to reach $50-60 billion by 2026 and potentially $100 billion by 2030 [21]. Group 3: Geopolitical Implications - The rising prices of storage chips are favorable for the US and South Korea but pose challenges for China, which relies heavily on imports from the three major DRAM manufacturers: Micron (US), Samsung, and SK Hynix (South Korea) [24][25]. - The US is pressuring South Korea to restrict HBM exports to China, which could hinder China's AI development [25][26]. Group 4: Domestic Market Developments - China is accelerating efforts to develop domestic storage chip capabilities, with policies favoring local manufacturers and aiming for over 70% localization in key information infrastructure by 2025 [28]. - Companies like Changxin Memory are expected to play a crucial role in the domestic market, with plans for an IPO and advancements in HBM technology [39]. Group 5: Valuation Insights - Despite the high valuations of domestic storage companies in A-shares, many still face technical gaps compared to their overseas counterparts, limiting their ability to capitalize on high-margin HBM products [33][34]. - The article notes that some domestic firms have not yet seen profit increases despite rising storage prices, indicating that current stock price increases are largely driven by narratives around domestic substitution rather than actual performance [34][35]. Group 6: Future Outlook - The article suggests that if the storage cycle extends beyond 2026, companies like Micron could see significant valuation increases, with potential P/E ratios rising to 40 times under optimistic scenarios [48]. - Conversely, if demand falls short, valuations could drop significantly, highlighting the volatility and uncertainty in the semiconductor market [48][49].

Core 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].

Group 1 - Morgan Stanley highlights that the AI boom is driving a "super cycle" in the storage industry, predicting upward momentum will extend into the second half of next year, benefiting South Korean chipmakers [1][2] - Samsung Electronics is reportedly increasing prices for DRAM and NAND flash storage in Q4, with DRAM prices expected to rise by 15%-30% and NAND by 5%-10% [2] - Demand for enterprise solid-state drives (eSSD) is surging, with order volumes for eSSD expected to match this year's total, leading to a projected 8% supply shortage for NAND next year [1][2] Group 2 - The average price of DRAM in Q4 is anticipated to be 9% higher than current levels, driven by demand from cloud server chips [2] - Morgan Stanley has upgraded the investment rating for South Korean semiconductor manufacturers from "neutral" to "attractive," raising Samsung Electronics' target price by 12% to 96,000 KRW [3] - SK Hynix has paused its price increase notifications but is reportedly coordinating with clients to adjust prices based on market conditions [2][3]