Storage Market Faces Supply-Demand Imbalance and Price Surge, Entering a Structural Growth Inflection Point

Driven by the explosive demand for AI, the global storage market is witnessing a structural growth inflection point. Both DRAM and NAND flash memory are in simultaneous shortage, and this supply crunch is expected to last until the first half of 2026 or even longer. Prices have surged significantly as a result, and the performance and market layout of leading enterprises have attracted strong interest from capital.

Chen Libai, Chairman of ADATA, a major module manufacturer, noted that in his over 20 years in the industry, this is the first time he has seen a simultaneous shortage of DRAM and NAND flash memory. Large-scale purchases by global cloud service providers have pushed up demand, reducing the safety inventory of storage original equipment manufacturers (OEMs) to a historic low, leading to a situation where “whatever is produced can be sold immediately.” To prioritize the production of DRAM, which has higher gross margins, a large amount of NAND production capacity has been diverted, further exacerbating the supply tension for both products. Although ADATA has high visibility of orders, its shipments are restricted by the quota limits of chip manufacturers. The company is actively striving for additional production capacity and plans to increase its inventory to NT$20 billion by the first quarter of 2026 to ensure stable shipments.

Samsung Electronics has become the focus of the capital market. A report from Morgan Stanley shows that leveraging its technological leadership in HBM4 and advantages in DRAM production capacity, Samsung’s profits are expected to surge by over 150% in 2026. KB Securities predicts that Samsung’s operating profit will hit a record high this quarter, with the operating profit of its semiconductor division in the fourth quarter likely to increase fivefold year-on-year. The price of DRAM is expected to rise by 35%, and the operating profit margin will climb to 52.9%. Multiple foreign institutional investors have raised Samsung’s target stock price, expressing optimism about its pricing power and profit growth potential in the storage market.

Price fluctuations in the consumer market have been particularly notable, with the price of consumer-grade memory nearly tripling in two months. Taking Samsung’s 16GB DDR5 memory as an example, its price was 72,000 won in September and has now risen to 198,000 won. SSD prices have also increased simultaneously: the price of Samsung’s 990 Pro 2TB SSD has gone up from 240,000 won to 329,000 won. In addition, SanDisk’s after-hours stock price rose by over 7% after being included in the S&P 500 Index. Morgan Stanley also raised the target stock prices of Micron Technology and SanDisk, expressing confidence in the industry’s profit prospects.

There have also been new breakthroughs on the technological front. Tachyum announced the open-sourcing of its TDIMM technology. This technology can reduce the construction and operation costs of AI data centers, with bandwidth 5.5 times higher than that of traditional DDR5 RDIMM and costs reduced by approximately 10%. It is expected to drive the low-cost and large-scale development of the storage industry and is also a key factor in achieving a significant reduction in the training costs of full-knowledge AI systems by 2028.

Overall, the surge in AI-driven storage demand has triggered a chain reaction in the supply chain. Supply shortages and price increases have become the main themes of the industry. Leading enterprises are seizing market share with their technological and production capacity advantages, while the implementation of new technologies is also providing a new direction for the long-term development of the industry.