Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Insights - The report highlights that the domestic storage manufacturers are expected to experience rapid growth in production capacity due to breakthroughs in domestic equipment and alleviation of financial pressures following IPOs [3][4] - AI demand is driving a storage shortage that is likely to persist at least until 2027, increasing the necessity for expansion [4] - Domestic equipment companies are gradually achieving breakthroughs in key processes, which is expected to significantly enhance the localization rate of storage equipment [5][6] Summary by Sections Industry Overview - The report indicates a cyclical upturn combined with technological breakthroughs in the storage chip equipment sector, accelerating the domestic substitution of equipment [3] Demand and Supply Dynamics - AI servers are driving exponential growth in storage demand, with DRAM usage per AI server being approximately eight times that of traditional servers, and NAND usage being about three times higher [4] - The report notes that traditional DRAM may not stabilize until after 2027, while NAND and high-capacity storage demand could continue until 2028 or longer [4] Equipment Localization - Key processes for storage expansion will significantly boost the demand for etching and thin-film equipment, with specific technologies such as ONON deposition and high aspect ratio etching being highlighted [5] - Current domestic equipment companies have made progress in various processes, with some achieving mass production in advanced production lines [6] Beneficiary Companies - Key beneficiaries identified include: - Etching Equipment: Northern Huachuang, Zhongwei Company - Thin-Film Deposition Equipment: Tuojing Technology, Northern Huachuang, Weidao Nano, Maiwei Co., etc. - Process Control Equipment: Zhongke Feicai, Jingce Electronics, etc. - Backend Equipment: Changchuan Technology, Jingzhida, Xidian Co., etc. [7]