Summary of Storage Industry Conference Call Industry Overview - The DRAM market inventory is gradually decreasing since 2025, with current utilization at approximately 82%, which is at the lower limit of normal supply-demand balance, positively impacting prices [1][2] - The fastest-growing demand sectors are servers and automotive electronics, while the mobile market holds the largest share at 35% [2] - The NAND Flash market is highly competitive, with Samsung leading in market share [1][4] Key Points and Arguments DRAM Market - Major players in the DRAM market include Samsung (41%), SK Hynix (27%), Micron (26%), and ChangXin (6%) [2] - Current prices for DRAM products: - DDR4 16GB 3,200 at $6.8 - DDR4 8GB ETT at $4.5 - DDR5 prices range from $6.0 to $8.5 [2][4] - Server market accounts for 30% of total storage demand, with significant demand spikes following new product launches like iPhone 17 and Xiaomi 17 [2] NAND Flash Market - Samsung holds a 31% market share in NAND Flash, with inventory expected to decrease starting in 2025 [4] - Current NAND Flash utilization is between 78%-80%, projected to rise to around 90% in Q4 2025 [4] - Typical NAND Flash product prices include: - 1TB QLC wafer at $5.5 - 1TB TLC wafer at $6.2 [4] Technological Developments - DRAM manufacturers are transitioning to D1β process technology, while ChangXin is at D1z, indicating a generational gap [4] - NAND Flash is evolving towards higher stacking layers, with Changjiang Storage closing the gap with international competitors [1][4] - Samsung is seeking collaboration with Changjiang Storage due to the trend of separating logic and storage arrays, with Xstacking technology being crucial [5] HBM Market - HBM prices are expected to stabilize with slight declines due to increased capacity [10] - AI servers constitute about 4.5%-5% of total storage, with HBM being essential for AI products [10] - Current HBM production capacity is 100,000 pieces/month, projected to expand to 326,000 pieces/month by 2025 [10] Additional Insights - The supply-demand dynamics are influenced by the transition of cold data to hot data, increasing the demand for SSDs, particularly ESSDs [26][28] - The HDD market is not expected to expand significantly, leading to a shift towards SSDs [26][27] - The overall storage industry is anticipated to maintain an upward trend due to improving supply-demand relationships and technological advancements [4] Conclusion - The storage industry is experiencing a positive shift with decreasing inventories and increasing demand across various sectors, particularly in DRAM and NAND Flash markets. The collaboration between major players and advancements in technology will likely shape the future landscape of the industry.

Summary of Key Points from Conference Call Records Industry Overview - The storage industry logic has shifted from the supply side to the demand side, with DRAM prices rising due to high-end demand and increased server DDR5 requirements, leading to a utilization rate exceeding 90%. It is expected that the supply-demand gap will drive prices further up by 2026 [1][6]. - In the NAND segment, AI data storage needs and the overflow demand from HDD to SSD are driving an increase in NAND demand, with the entire industry utilization rate exceeding 80%. Demand is projected to grow by 20%-30% in 2026, with profit elasticity greater than that of DRAM [1][6]. Key Companies and Investment Opportunities - Preferred investment targets in the domestic storage sector include companies benefiting from price elasticity, such as Demingli and Jiangbolong, with a focus on their inventory levels and second growth curves, like Baiwei Storage's advancements in advanced packaging and high-speed testing equipment [1][7]. - Zhaoyi Innovation has gained DDR4 capacity through collaboration with Changxing and has made progress in end-side storage chips, with potential volume growth through partnerships with companies like Qualcomm [1][10]. - Jucheng Co. benefits from VPD chips in Samsung SSDs, positioning itself as a leader in this field, which will bring significant incremental growth [1][10]. - Jinghe Integration collaborates with Changxing to enhance storage density through new processes, expecting a production capacity of 30,000 wafers [1][10]. Market Trends and Price Projections - The storage price increase is expected to continue until the end of 2026 or even early 2027, with companies like Micron and SanDisk performing well in the US market, and domestic companies like Yangtze and Changxin also warranting attention post-IPO [1][11]. - The overall trend in the storage industry indicates that the upward price momentum is unlikely to end soon, making it a key area of focus [1][11]. Impact of Domestic Production and Compliance - The acceleration of domestic production is evident, with Samsung enhancing compliance checks, prompting domestic chip companies to shift towards SMIC for production. Companies like Haiguang and Cambricon are also gaining opportunities, although supply chain issues remain a concern [2][13]. - Equipment and materials companies such as North Huachuang and Zhongwei Semiconductor are expected to benefit significantly from the domestic production trend [2][13]. Electronic Sector Volatility - Recent volatility in the electronic sector is primarily attributed to US-China relations, particularly tariff issues, which have significantly impacted stock performance due to the high export ratio of the electronic sector. Comparisons between April and the current situation show a trend towards accelerated domestic production, with sectors like optical modules and PCBs performing well [3][4]. Recommendations for Investment Configuration - In the current market environment, it is recommended to prioritize investments in companies with industrial trend advantages, particularly in the storage sector, which has shifted focus from supply to demand [4][5].

Group 1 - The U.S. stock market reached new highs last week, with the Nasdaq and Dow Jones both rising over 1%, and Micron Technology increasing nearly 6% [1] - The U.S. September CPI year-on-year was 3%, lower than expected, and the core CPI was also 3%, indicating potential easing of inflation concerns [1] - The European rating agencies downgraded the U.S. sovereign credit rating, reflecting concerns over fiscal stability [1] Group 2 - The China Securities Regulatory Commission is focused on enhancing the resilience and risk resistance of the capital market [1] - The People's Bank of China conducted a 900 billion yuan MLF operation with a one-year term on October 27 [1] - Guizhou Province's energy bureau director Chen Hua has been appointed as the chairman of Moutai Group [1] Group 3 - Dongfang Fortune reported a net profit of 3.53 billion yuan for the third quarter, a year-on-year increase of 77.74% [1] - Guoxuan High-Tech's net profit for the third quarter was 2.167 billion yuan, a year-on-year increase of 1434.42% [1] - Luoyang Molybdenum plans to invest 1.084 billion USD in the construction of the KFM Phase II project in the Democratic Republic of the Congo, which is expected to add an average annual production of 100,000 tons of copper metal upon reaching full capacity [1]

Group 1 - The core discussion between China and the US includes topics such as export controls, tariff suspensions, fentanyl cooperation, and trade expansion, leading to a preliminary consensus [1] - The State Council's report emphasizes the need for a moderately loose monetary policy to support economic recovery and enhance financial regulation [2][6] - A breakthrough in photoresist technology has been achieved by a research team at Peking University, which could significantly reduce defects in lithography processes [3] Group 2 - The latest report on state-owned assets reveals that by the end of 2024, the total assets of state-owned enterprises (excluding financial enterprises) amount to 401.7 trillion yuan, with state capital equity at 109.4 trillion yuan [4] - The successful launch of the Gaofen-14 02 satellite enhances capabilities for high-precision imaging and digital terrain mapping [5] - The storage industry is experiencing disruptions, with some manufacturers halting quotes for DRAM and Flash products, impacting the domestic supply chain [10] Group 3 - A Chinese research team presented new clinical data on a transcatheter aortic valve system at a global cardiovascular conference, showcasing innovation and effectiveness in treating aortic valve regurgitation [9] - The Ministry of Science and Technology emphasizes the importance of original innovation and key technology breakthroughs to support China's modernization and technological independence [11]

Market Overview - The A-share market experienced a significant rebound this week, with the Shanghai Composite Index achieving four consecutive days of gains and breaking previous highs [1][3] - The technology sector, particularly the STAR 50 Index and the ChiNext Index, saw impressive performance, both rising over 7% [1][2] - The market sentiment has notably improved, transitioning from a previous period of stagnation to a bullish trend [1][3] Key Indices Performance - The Shanghai Composite Index and the Shanghai 50 Index reached new highs, indicating strong leadership in the market [3] - The recent upward movement is expected to continue, although at a slower pace compared to the rapid increases seen in July and August [4][5] Upcoming Events and Market Influences - Key events to watch include the conclusion of US-China trade talks in Malaysia on October 27 and the APEC meeting in South Korea from October 31 to November 1, which may impact market sentiment depending on outcomes [6] - The upcoming earnings reports from major AI companies in the US, such as Microsoft and Amazon, will provide clarity on the performance of A-share AI stocks [6][7] - The Federal Reserve's interest rate decision on October 30 is anticipated to influence market conditions, especially given recent lower-than-expected inflation data in the US [7] Sector Focus - The technology sector, particularly AI-related stocks, is expected to remain a focal point, with emphasis on AI computing power and semiconductor chips [9][10] - The storage sector is entering a price increase cycle, with some products experiencing halted quotations, indicating strong demand [10] - The humanoid robotics sector is gaining traction, with significant orders expected from companies like JD Logistics and Tesla, which may drive market interest [11] Military Electronics Sector - The military electronics sector is showing promise, with a reported 51.1% year-on-year increase in revenue for 64 companies in the first half of the year [12] - The sector is expected to benefit from the acceleration of previously delayed orders and the upcoming "14th Five-Year Plan" initiatives [12] Conclusion - The recent highs in the Shanghai Composite and Shanghai 50 indices suggest a high probability of continued market upward movement, albeit at a reduced pace [12] - Investment focus should be on sectors with clear opportunities, particularly in technology and military electronics, while monitoring the performance of AI hardware and related applications [12]

Group 1 - The report highlights that the Fourth Plenary Session of the 20th Central Committee has set a strategic tone for the "15th Five-Year Plan," emphasizing the need to consolidate achievements from the "14th Five-Year Plan" while addressing complex international challenges [2][4] - The strategic goals outlined in the report include significant increases in economic, technological, defense, and comprehensive national strength, reflecting a response to intensified global competition and geopolitical instability [3][4] - The report emphasizes the importance of technological innovation as a driver for new productive forces, urging accelerated self-reliance in key technologies and the integration of technology and industry [5][6] Group 2 - The report indicates a structural adjustment in key tasks, prioritizing the construction of a modern industrial system, expanding high-level opening-up, and improving people's livelihoods to promote common prosperity [4][5] - The strategic deployment includes the establishment of a "space power" and "agricultural power," highlighting the need for comprehensive development in aerospace and rural modernization [5][6] - The current economic situation is assessed as stable with strong potential, and the report calls for sustained macroeconomic policies to support growth and mitigate local government debt risks [6][7] Group 3 - Historical data shows that after the release of similar reports, small-cap and growth stocks tend to outperform, with an average growth style increase of 3.24% observed in previous cycles [4][12] - The report anticipates that the emphasis on technological innovation will continue to dominate the policy landscape, with a focus on sustainable development and practical implementation in high-tech industries [5][6] - The global liquidity environment is expected to improve with potential interest rate cuts by the Federal Reserve, which may benefit growth stocks and facilitate a reallocation of global funds [7][10] Group 4 - The report identifies key sectors to watch, including technology trends in semiconductors, computing power, and energy storage, as well as high-growth areas like lithium battery supply chains and wind power [10] - It underscores the importance of the upcoming full text of the "15th Five-Year Plan" recommendations, which is expected to provide further guidance on industrial development [9][10] - The report concludes that the strategic focus on technology and industry development will reinforce the narrative around growth stocks, presenting structural investment opportunities in the medium to long term [10]

Core Insights - The memory industry is experiencing a cyclical recovery driven by increased capital expenditures from hyperscale companies and demand from AI inference, with historical data suggesting that the industry has not yet reached its peak [5][10] - UBS indicates that demand growth is outpacing supply growth, leading to a projected shortage in the coming year [7] Market Trends - The current memory cycle is reminiscent of past cycles, particularly the rise of cloud computing, with AI inference driving demand [5][7] - Memory stocks have seen an average increase of 178% this year, but to match the peak growth of 160% YoY seen in 2017, contract prices would need to rise by approximately 60% [10] Investment Strategies - Morgan Stanley suggests a more lenient approach to valuations during the upward phase of the cycle and an optimistic outlook on earnings expectations, especially during super cycles [9] - Historical data indicates that memory stocks typically peak 4 to 8 months before earnings peak, suggesting a need for cautious exit strategies [10] Demand and Supply Analysis - The demand and supply model shows that while demand is increasing, supply is not keeping pace, leading to ongoing shortages [12][14] - Inventory levels in the industry are never zero, which means that even in tight supply conditions, there will always be some inventory, affecting pricing dynamics [14]

Core Viewpoint - The A-share market continues to show strength, driven by supportive policies and breakthroughs in the global AI industry, with the Shanghai Composite Index reaching a ten-year high [2] Group 1: Market Performance - The AI-related sectors, including AI computing power, storage chips, and innovative pharmaceuticals, have become market focal points, while traditional consumer and financial sectors remain relatively flat [2] - The fund "Invesco Great Wall Steady Return Mixed A" achieved a remarkable return of 102.88% over the past year, ranking among the top in the active equity fund performance [2][3] Group 2: Fund Manager's Journey - Fund manager Jiang Shan's career trajectory is divided into three phases: solid foundation in fixed income (2015-2023), mixed strategy development (2023-2024), and the current AI sector boom (from August 2024) [3] - Since taking over the equity fund on August 13, 2024, the fund has achieved a return of 179.64%, establishing itself as a "doubling fund" [3] Group 3: Investment Strategy - Jiang Shan's investment strategy focuses on the AI industry, categorizing it into three stages: training, inference, and application, with dynamic adjustments to the fund's focus [5] - The fund's maximum drawdown over the past year was only 18.14%, significantly lower than the average of 28.7% for similar funds, attributed to diversified investments and flexible positioning [5] Group 4: Portfolio Composition - The top ten holdings of the fund are concentrated in the core segments of the AI industry, with significant positions in companies like New Yisheng and Zhongji Xuchuang [6] - The weighted P/E ratio of the top holdings is 60.21 times, supported by the high growth potential of the AI industry despite being above the average level of similar funds [6] Group 5: Future Outlook - The fund's future performance will depend on the evolution of the AI industry's fundamentals and overall market conditions, with a focus on both computing power and application sectors [7] - Jiang Shan plans to continue focusing on AI's computing power and application areas, while also exploring opportunities in non-core sectors like innovative pharmaceuticals and metals [7]

Core Viewpoint - The company has achieved a breakthrough in UFS4.1 products through its self-developed main control chip, demonstrating superior performance compared to market competitors [1] Group 1 - The self-developed main control chip has been validated through original factory and third-party testing, showing advantages in process, read/write speed, and stability over comparable market products [1] - The company has received recognition from major storage manufacturers, including SanDisk, and has gained approval from multiple Tier 1 clients, with related implementation work accelerating [1]

Group 1: Market Trends and Price Forecast - The recent increase in storage prices is attributed to significant new demand from major cloud service providers for high-capacity DDR5 and eSSD, with server customer orders exceeding original supply expectations. [2] - According to CFM's flash market forecast, Q4 price increases are expected to reach 10% for eSSD, approximately 10%-15% for DDR5 RDIMM, and 5%-10% for Mobile NAND ASP, with LPDDR4X/5X ASP rising by 10%-15%. [2][3] Group 2: Enterprise Business Growth - The company ranks third in total capacity for enterprise-grade SATA SSDs in China and first among domestic brands, with its enterprise PCIe SSD and RDIMM products beginning mass adoption by leading domestic companies. [3] - The company is actively expanding its high-performance storage products for data center applications, including new memory types like CXL2.0 and MRDIMM, and has launched SOCAMM2, designed specifically for AI data centers, which offers breakthrough energy efficiency and performance. [3] Group 3: UFS4.1 Product Development - The company has successfully developed UFS4.1 products, a capability held by only a few global enterprises, with its self-developed controller chip outperforming comparable market products in terms of process, read/write speed, and stability. [4] - UFS4.1 is positioned as a high-end product in the embedded storage sector, becoming the preferred storage configuration for flagship smart terminal models from Tier 1 customers, as the market shifts from eMMC to UFS. [4] Group 4: Controller Chip R&D and Deployment - The storage controller chip is critical for overall storage performance, and the company has launched four series of controller chips, achieving significant deployment with over 7,800,000 units by the end of the month, with rapid growth continuing. [5] - Products equipped with the self-developed controller are currently undergoing validation with multiple manufacturers, and the deployment scale of self-developed controller chips is expected to see substantial growth throughout the year. [5]