Summary of Conference Call on the Storage Industry Industry Overview - The storage industry is experiencing significant growth driven by AI demand, particularly in training and inference processes, leading to increased requirements for computing power and storage [1][2] - The overall market is currently in a high prosperity phase, with storage chip prices rising significantly since September 2025, with average price increases of 20% to 30% expected to continue [2] Key Company Performances - **SanDisk**: Reported $2.3 billion in revenue for Q1 of fiscal year 2026, with a gross margin of approximately 30%. The outlook for the next quarter is optimistic, with expected revenue between $2.55 billion and $2.65 billion and a gross margin increase to 41% to 43% [1][3] - **Western Digital**: Achieved $2.8 billion in revenue with a gross margin of 44%, with 90% of its business coming from cloud services. The company is optimizing costs, indicating strong profitability and a solid business structure [1][4] - **Micron**: Reported nearly 80% of its revenue from DRAM and 20% from NAND during the June to August period, with optimistic expectations for the next quarter [4] - **Seagate**: Generated $2.6 billion in revenue with a gross margin of 40%, and its data center revenue grew over 30% year-on-year [4] Supply and Demand Dynamics - The storage industry is currently facing a severe supply-demand imbalance, expected to last at least until mid-2026 or even throughout the year [3][6] - Major manufacturers are cautious about expanding production capacity, opting instead to adjust product structures to increase high-capacity offerings to meet demand [6] - The operating rates of major overseas manufacturers like Samsung, SK Hynix, and Micron are currently low, around 85% to 90%, with production cuts of 10% to 20% planned for Q4 2024 [1][2] Domestic Market Insights - Domestic module manufacturers such as Demingli are noted for their inventory levels and procurement capabilities, having supply agreements with overseas suppliers and domestic companies like Longhua, allowing them to secure more capacity during shortages [5] - If Demingli's inventory of 10 billion with a 50% price increase is considered, it could lead to profits of approximately 5 billion, suggesting a potential market capitalization of 100 billion at a 20x P/E ratio [5] Future Outlook - The storage industry's prosperity is expected to continue, with manufacturers' performances projected to grow quarter-on-quarter. However, potential impacts from future capacity releases should be monitored [3][6]