Summary of J.P. Morgan's Long-Term NAND Market Dynamics Industry Overview - The report focuses on the **NAND Flash Memory** sector within the **semiconductors** industry, highlighting its evolution, current innovations, and future outlook [3][10][11]. Key Insights Long-Term Market Dynamics - The **Total Addressable Market (TAM)** for NAND is expected to grow at a **CAGR of 34%** over the next three years, driven by a **20% CAGR in bit demand** and a **low-teens percentage increase in ASP** [3][18]. - Historical trends show that NAND bit demand growth has decelerated due to maturing end markets like smartphones and PCs, but the introduction of **eSSD** has shifted growth dynamics [3][14][17]. Demand Drivers - **eSSD** demand is projected to grow significantly, with a **CAGR of 49%** from 2025 to 2028, driven by AI applications and data center needs [3][17]. - As of 2024, **SSDs account for 54%** of NAND bit demand, while smartphones represent approximately **30%** [17][90]. Pricing and Revenue Trends - NAND revenue per Kwfpm is forecasted to increase from **US$55k in 2025** to **US$102k by 2027** [3]. - The ASP for NAND has historically been under pressure but is expected to rise due to strategic production cuts and strong demand from AI-driven data centers [3][40]. Comparison with DRAM - NAND is viewed as less attractive compared to DRAM due to market fragmentation and lower exposure to AI applications. However, the **AI NAND TAM** is expected to reach **US$70 billion** by 2028, compared to **US$220 billion** for AI DRAM [3][37]. - The capital intensity for NAND is projected to average **16%** from 2025 to 2027, compared to **26%** for DRAM, indicating stricter capex discipline among NAND suppliers [3][37]. Technology and Capacity Trends - The transition to **3D NAND technology** has allowed for increased storage capacity without a proportional rise in cost, supporting ASPs [39]. - The industry is experiencing a **capacity shrink** due to technology migration, which may impact future production capabilities [4][39]. Additional Insights - The NAND industry has not seen the same level of consolidation as DRAM due to its diverse applications and technological differentiation, allowing smaller players to thrive [87][88]. - The report emphasizes the importance of **AI** in shaping future demand, with AI memory expected to account for nearly half of the global memory TAM by 2027, growing at an **80% CAGR** during 2024-2027 [59][60]. Conclusion - The NAND Flash Memory market is poised for significant growth driven by technological advancements, particularly in eSSD applications and AI integration. The competitive landscape remains dynamic, with opportunities for both established and emerging players in the sector.

Key Takeaways AMAT's NAND sales nearly doubled to $1.41B in FY25, lifting flash memory to 7% of total revenues.Applied Materials benefited from higher customer spending on NAND fab upgrades.Applied Materials benefited from the industry shift to higher-density 3D NAND.Applied Materials’ (AMAT) flash memory or NAND sales nearly doubled to $1.41 billion in fiscal 2025 from the year-ago figure of $747.4 million. Although AMAT has a lower market share in the NAND space, it is gaining prominence. The growth in th ...

Company Overview - Western Digital Corporation (WDC) is valued at a market cap of $35.7 billion and specializes in developing, manufacturing, and selling data storage devices and solutions based on hard disk drive (HDD) technology [1] - The company offers a wide range of products including internal HDDs, data center drives, external drives, portable drives, and NAS for both home and office use [1][2] Market Position - WDC is classified as a "large-cap stock" due to its market cap exceeding $10 billion, highlighting its size and influence in the computer hardware industry [2] - The company is recognized as a global leader in data storage solutions, with a diverse portfolio that includes HDDs, solid-state drives (SSDs), and NAND flash memory [2] Stock Performance - WDC shares reached a 52-week high of $103.98 and have rallied 79.6% over the past three months, significantly outperforming the Dow Jones Industrial Average's (DOWI) 7.6% return during the same period [3] - Over the past 52 weeks, WDC has increased by 114.5%, compared to DOWI's 9.9% rise, and on a year-to-date basis, shares are up 130.5% [4] Financial Performance - On July 30, WDC reported strong Q4 earnings, with a 30% year-over-year revenue increase to $2.6 billion, surpassing analyst estimates by 6.5% [5] - The company's adjusted gross margin expanded by 610 basis points, and adjusted operating income surged 147.3% year-over-year to $732 million [5] - WDC's adjusted EPS of $1.66 exceeded consensus estimates of $1.48 [5]