Storage Market Enters “Super Cycle”: Supply-Demand Imbalance Triggers Price Surge, Industry Seeks Breakthroughs Amid Pressure
Driven by the explosive growth of the AI industry, the global storage market is undergoing a rare supply-demand restructuring. DDR5 memory prices have soared, and the supply of all storage categories has tightened. From original equipment manufacturers (OEMs) to end-device producers, the entire industrial chain has been significantly impacted, marking the official entry of the industry into a “super cycle”—with supply-demand imbalance emerging as the core contradiction in the current market.
From the supply side, the structural shift in OEM production capacity is the primary cause of the shortage. To seize the high-value High-Bandwidth Memory (HBM) market amid the AI boom, leading manufacturers such as Samsung, SK Hynix, and Micron have accelerated the contraction of traditional storage production capacity, redirecting mature manufacturing resources to HBM and DDR5 production. This has directly widened the supply gap of DDR4, which is expected to exceed 70,000 units by the end of the year and remain unbridgeable even by 2026. Even for DDR5, which enjoys strong demand, supply has tightened due to capacity diversion to HBM. For instance, the price of Samsung’s 32GB DDR5 product surged from 149 in September to 240 by mid-November, representing a staggering 60% increase. Domestically, SMIC (Semiconductor Manufacturing International Corporation) is operating at full capacity, with a production utilization rate of 95.8% in the third quarter. However, to prioritize the delivery of urgent orders for analog chips and storage products, the company has had to delay non-urgent smartphone orders, further intensifying supply pressure for certain storage categories.
On the demand side, a dual driving force of “traditional demand upgrading + explosive AI-driven new demand” is evident. On one hand, consumer electronics devices such as PCs and smartphones have generally raised their memory requirements to 16GB or above, driving steady growth in traditional storage demand. On the other hand, AI servers have become a new engine for demand growth: they not only fuel a surge in HBM demand but also push up the usage of NOR flash memory—with the value of NOR flash required for a high-end server rack projected to rise from 600 to 900 within two years. Meanwhile, cloud service providers are shifting their strategies: starting from 2026, they plan to replace some HDDs with QLC eSSDs for cold data storage, creating additional demand growth for NAND flash memory. Under the overlap of multiple demand drivers, the supply-demand gap in the storage market continues to widen.
The supply-demand imbalance has directly triggered a chain reaction. In terms of prices, all storage categories—including DRAM, NAND, and NOR flash—have seen price hikes, and the upward trend may extend to storage chips and even CPUs next year. Along the industrial chain, motherboard manufacturers have suspended the launch of new motherboard models due to concerns about price volatility. End-device producers have shifted their focus from product design to “securing supply” and “cost sharing”: some have reduced purchases or paused plans, while others have raised the prices of end products to maintain profitability.
Amid industry reshuffling, enterprises are exploring their own paths to breakthroughs. SK Hynix has achieved precise supply matching through its HBM business: in the third quarter, HBM revenue accounted for over 40% of its total DRAM revenue, its revenue share in the U.S. market rose to 70.9%, and its cash and cash equivalents exceeded its liabilities for the first time. Phison has launched a new enterprise-grade SSD controller, the SM8388, which adapts to AI storage needs with high energy efficiency. SMIC, for its part, is ensuring the supply of core storage categories by adjusting order priorities.
Currently, the supply-demand game in the storage market’s “super cycle” continues. As AI demand further unfolds and OEMs adjust their production capacity, whether the market’s supply and demand can return to balance and how cost pressures will be transmitted will become key issues that all links in the industrial chain must address collectively.