Summary of Conference Call on Storage Industry Industry Overview - The storage industry is currently experiencing strong performance driven by AI demand growth and limited upstream supply due to low expansion willingness and technological bottlenecks [1][2] - The storage sector saw significant gains in September, particularly among module manufacturers, computing servers, and enterprise storage companies, reflecting market recognition of an AI-driven storage supercycle [1][3] Key Insights and Arguments - Consumer-grade NAND prices surged by 30% in September, leading to severe channel shortages, with expectations of a 20%-30% increase in new contract prices from Korean manufacturers [1][4] - DRAM demand growth is outpacing supply capacity, with prices expected to continue modestly increasing in the first half of next year [1][4] - The NAND upcycle is anticipated to last longer than traditional cycles due to the growing demand for training and inference servers [1][4] - Most storage companies reported a turnaround to profitability in Q3, marking a performance inflection point, with historical data indicating that significant growth typically lags behind price increases by about two quarters [1][5] Future Trends - The current market cycle is expected to last longer than previous cycles, with structural changes among different types of storage products [2][3] - Despite potential short-term fluctuations due to tariff changes, the long-term industry trend remains positive, with any pullbacks seen as good entry points for investment [3][6] - The first wave of stock price increases has been driven by rising storage prices, and the next wave will be driven by sustained earnings growth [5][6] Additional Important Points - The relationship between stock prices and earnings is crucial; continued upward momentum in stock prices requires sustained earnings growth [5] - The upcoming Q3 earnings reports will be critical for assessing future stock performance and market trends [3][6]

Core Viewpoint - The semiconductor storage industry is expected to experience steady growth driven by the maturation of generative AI and large language models, alongside sustained demand for core hardware, potentially leading to a price and volume increase from 2025 onwards, maintaining a rating of outperforming the market [1][2]. Group 1: Industry Trends - The NAND price sentiment is rising due to enterprise-level stocking and new smartphone demands, with significant capital expenditures from domestic internet companies, such as Alibaba's investment of 38.6 billion yuan in AI and cloud infrastructure in Q2 2025, and Tencent's capital expenditure doubling to 19.107 billion yuan in the same period [3]. - The DRAM market is experiencing a significant price increase due to the EOL notifications from manufacturers, with expectations of a 20%-50% quarter-on-quarter price rise in Q4 2025, following a 70% increase in contract prices for Nanya Technology in Q3 2025 [4]. Group 2: Market Dynamics - The NOR Flash market is expected to see a healthy supply-demand balance, with price increases projected to reach double-digit percentages in Q4 2025, driven by rising AI data center demands and a recovering automotive market [5]. - The niche DRAM market is facing a supply shortage as major overseas manufacturers exit, leading to price increases, with expectations of continued price hikes throughout the year [5]. Group 3: Investment Recommendations - Companies to focus on include: for niche storage - Zhaoyi Innovation, Puran, Juchen, and Dongxin; for module manufacturers - Kaipu Cloud, Jiangbolong, Demingli, Baiwei Storage, and Shannon Chip Creation; for storage supporting chips - Lanke Technology and Lianyun Technology [6].

Summary of Storage Industry Conference Call Industry Overview - The storage industry is benefiting from rapid growth in AI, cloud, and end-user demand, with significant increases in consumer demand and stable enterprise demand, leading to an expected substantial increase in overall profit margins in the second half of the year [1][2][3] - Structural changes in supply, such as HBM occupying capacity leading to DDR4 production halts, and a significant price increase of low-power DDR by approximately 150%, indicate a shift in market supply-demand dynamics [1][3][4] Key Insights and Arguments - Domestic storage companies are actively developing main control chips and transitioning from consumer markets to enterprise markets, while memory chip companies are advancing towards 3D DRAM, indicating a profound change in the competitive landscape [1][4][5] - The storage market is expected to have greater sustainability and elasticity in 2025 compared to 2024, with a notable increase in investor interest [1][6] - Recent price increases by SanDisk and Micron are driven by rising storage demand in AI applications, data centers, client devices, and mobile sectors, signaling an upward price trend in the storage market [1][8] Price Trends and Demand Changes - Storage prices in Q3 are significantly higher than in Q2, indicating a strong profit margin for storage companies in the second half of the year [2] - The demand for consumer-grade storage has shown notable growth in 2025, with mobile memory increasing from 4GB to 16GB and new Apple video devices starting at 256GB [3] - The second half of the year is expected to see price increases for NAND and DDR4 driven by changes in industry demand, with traditional consumer replenishment needs and AI high-performance storage demands contributing to this trend [1][9] Investment Opportunities - Investment opportunities in the storage sector are concentrated on new demand growth, particularly in edge AI applications (e.g., AI glasses) and the domestic replacement of enterprise storage [1][10] - The market for AI glasses is expected to see explosive growth, with significant storage module value, while the enterprise storage market is projected to increase its domestic production rate from 20% to 50%, creating a market space worth hundreds of billions [10] Additional Important Points - The storage industry's valuation is typically forecasted based on historical peaks, with this cycle expected to outperform 2024 but likely not reach 2021 levels [7] - The price increases in the second half of the year are supported by strong demand from cloud service providers and the need for higher capacity in AI training and inference stages [9]

Core Viewpoint - The 2025 ELEXCON Shenzhen International Electronics Show highlighted the importance of domestic innovation in the AI sector, with Demingli Technology showcasing its comprehensive storage solutions aimed at empowering industrial intelligence upgrades [1][3]. Group 1: Company Achievements - Demingli Technology was awarded the "Annual AI Market Leader Award" at the ELEXCON conference, recognizing its commitment to domestic substitution and independent innovation in the AI field [3]. - The company has developed a full-stack product ecosystem for AI, including consumer, enterprise, and industrial-grade solutions, enhancing its self-controllable capabilities through a "chip + algorithm + scenario" approach [3][11]. Group 2: Product Offerings - Demingli's embedded storage products, including LPDDR, UFS, and eMMC, are designed to meet the high concurrency and low latency demands of AI applications, with LPDDR 5X and UFS 2.2/3.1 achieving speeds of up to 8533 Mbps and 2000 Mbps respectively [3][4]. - The company has completed compatibility certification for its eMMC 5.1 and LPDDR4X products with mainstream SoC platforms, ensuring industry-leading consistency and durability [4]. Group 3: Industrial Solutions - Demingli focuses on high-value industrial control markets, offering customized solutions such as SATA SSDs and PCIe SSDs that meet stringent industrial performance standards [7]. - The fully domestically produced industrial-grade SSD solutions, including the DS1420, ES1020, and VS1030 series, utilize self-developed SATA SSD controllers, supporting the domestic replacement of critical information infrastructure [7]. Group 4: Consumer Solutions - The company has launched a new generation of consumer-grade storage products tailored for various scenarios, including entertainment and professional creation, with PCIe 5.0 SSDs achieving read/write speeds of 14 GB/s [9]. - Demingli's portable SSDs feature a lightweight design with capacities up to 4TB and transfer speeds of 2000 MB/s, catering to the diverse needs of young and professional users [9]. Group 5: Strategic Vision - Demingli positions storage as a core infrastructure for the intelligent development of industries, aiming to inject new momentum into domestic substitution and promote the deep integration of AI across consumer electronics, industrial control, and edge intelligence [11].