AI-driven storage demand is increasing rapidly, Orient: domestic storage industry chain embraces historical opportunities.

Recently, Orient released a research report stating that the demand for AI inference is expected to drive the rapid growth of storage chip demand. Some investors still underestimate the extent to which AI will drive demand for storage chips. The report states that the future demand for AI inference applications will significantly increase the need for active data storage, thereby driving the rapid growth of storage chip demand. In the process of AI large model inference, frequent access to data is needed to achieve high-quality content generation. For example, Retrieval Augmented Generation (RAG) technology allows the Large Language Model (LLM) to extract relevant information from a knowledge base, and approximate queries for RAG databases involve extremely dense random read operations. In addition, in the process of large language model inference, KV caching is needed to accelerate the inference process. Overall, the AI inference process will bring significant changes to storage structures and is expected to increase the demand for active data storage. Mechanical hard drives, which currently dominate data center storage, are unable to meet the demand for high-speed access to active data, so SSDs and other technologies are expected to continue to expand their application in AI inference. As AI applications become more widespread in the future, the demand for AI inference will continue to increase, leading to sustained rapid growth in storage chip demand. The continuous imbalance between supply and demand in storage is providing a historic opportunity for the expansion of domestic storage production. Currently, the two major domestic storage chip manufacturers, Hefei Changxin/ Yangtze Storage, still have relatively low market share in the DRAM/NAND market. The continuous supply-demand imbalance in storage, coupled with limited expansion progress by overseas storage giants in general storage, provides a historic opportunity for the expansion and market share improvement of domestic storage production. In terms of technology, Hefei Changxin launched DDR5 products in November 2025, achieving international first-tier levels in mainstream technical parameters such as peak rates in the DRAM field; and Yangtze Storage has made a breakthrough in 3DNAND technology with its self-developed Xtacking architecture in the NAND field. In terms of IPO progress, Changxin completed IPO counseling in October 2025, and Changxin Technology Group, the parent company of Yangtze Storage, completed the shareholding reform in September 2025. It is predicted that after financing, the two storage companies will achieve significant expansion in production volume in the future, benefiting the entire industry chain. Investment recommendations and investment targets The continuous supply-demand imbalance in storage will help drive the expansion and market share improvement of the two major domestic storage companies. Relevant investment targets include: - Domestic semiconductor equipment companies such as Advanced Micro-Fabrication Equipment Inc. China (688012.SH), Beijing Jingyi Automation Equipment (688652.SH), Jiangsu Leadmicro Nano Technology (688147.SH), Piotech Inc. (688072.SH), NAURA Technology Group (002371.SZ), etc.; - GigaDevice Semiconductor Inc. (603986.SH), Ingenic Semiconductor (300223.SZ), etc., which focus on AI storage solutions at the end; - Companies such as Montage Technology (688008.SH), Maxio Technology (688449.SH) that benefit from storage technology iteration; - Domestic enterprise-level SSD and storage solution manufacturers such as Shenzhen Longsys Electronics (301308.SZ), Shenzhen Techwinsemi Technology (001309.SZ), Biwin Storage Technology (688525.SH), LENOVO GROUP (00992), etc.