Storage chips usher in a super long cycle, prospecting A-share, Hong Kong, and American markets excellent targets.

Recently, the storage chip sector has sparked an investment frenzy, with A-shares, Hong Kong shares, and US stocks all experiencing significant and sustained increases. Some individual stocks have performed exceptionally well, such as A-share Infotmic Co., Ltd (00670.SZ) which has seen four consecutive trading days of gains, and US stock Micron Technology, Inc. (MU.US) which has seen gains of over 15% in four trading days, and Hong Kong stock GigaDevice Semiconductor Inc. (03986) which has seen an increase of over 80% in the first 8 trading days. Behind the overall rise in this sector, a super bull market cycle in the storage chip industry may be brewing. It is understood that in the fourth quarter of 2025, leading manufacturers such as Samsung Electronics and SK Hynix announced a 30% increase in their storage chip prices, which continued into 2026. According to the latest price trends published by TrendForce, the prices of various types of memory DRAM and flash have risen by double digits since the end of last year. CounterpointResearch's monthly price tracking report indicates that storage chip prices are expected to rise by another 40%-50% in Q1 of 2026 and by about 20% in Q2. The rising prices of storage chips have also driven sustained increases in individual stocks in the sector. In January of this year, the A-share storage chip sector saw an increase of over 25%, while the US stock storage concept saw an increase of nearly 40%, and the Hong Kong stock storage concept saw an increase of over 20%. Investment banks are also optimistic about the future market, such as Morgan Stanley, which pointed out in a recent research report that the traditional storage chip supply-demand gap is continuing to widen, leading to a new super cycle from the second quarter of 2025 to 2026. So, what is the logic behind the sustained increase in storage chips, and what are the target concepts in A, Hong Kong, and US stocks? Blue-chip and potential stocks may present investment opportunities. Dual-drive supply and demand, storage industry entering a big cycle Looking back at the development cycles of the storage industry, according to research reports by CICC, since 2016, there have been three major cycles, with each cycle lasting four years, from rapid growth to slow growth, and then to a decline, accompanied by a price inflation trend, leading to a spiral increase in the overall market size. The third cycle started in 2024, mainly driven by the wave of AI development under the demand for intelligent entities. In 2024, the accelerated iteration of large AI models has driven the landing of terminal products such as AI mobile phones, AI servers, and AI computers, significantly increasing user purchasing demands. The downstream demand for DRAM and NAND Flash, the two core storage chips, is mainly composed of servers, smart phones, and personal computers (PC), with a total contribution of 80% and 75% respectively. In 2025, DeepSeek emerged, significantly reducing the cost of AI applications, entering the era of AI intelligent entities. Cloud companies are increasing capital expenditure, deploying AI servers and computing power centers, stimulating continuous growth in demand in multiple scenarios, and driving a simultaneous increase in the volume and prices of storage chips. In fact, the storage chip industry is entering a new cycle, mainly driven by the scarcity of supply and the release of demand for AI intelligent entities. Market size growth is expected to continue until 2027, bringing a market feast to the industry chain. From the supply side, DRAM and NAND Flash are the two mainstream storage chips. DRAM is a volatile memory that can directly interact with CPU, GPU, and other computational chips, used for quickly storing temporary information generated during billions of calculations per second. This has become a hard currency in the era of AI intelligent entities. The DRAM technology roadmap has evolved from DDR1 to DDR5, continuously improving energy efficiency and transmission speeds. DRAM supply is in an oligopoly situation, with SK Hynix, Samsung, and Micron collectively holding 97.49% market share in 2024. In 2025, DDR4 and DDR5 saw significant price increases, with DDR4 rising by several times but still facing shortages, triggering hoarding. In the fourth quarter, Samsung, NAND, and Micron substantially increased DDRAM prices by 15-30%. However, with the high computational power demands of AI, HBM (High Bandwidth Memory) has become the core development direction for DRAM chips. HBM is a high-performance DRAM based on 3D stacking technology, meeting the high computational power needs of AI servers and intelligent entities. Since 2025, HBM has been the focus of DRAM, with price increases and profit margins significantly higher than other types of chips. Manufacturers have also started to shift their production to this type of chip. For example, Micron has already sold out its HBM capacity by the end of 2026, and Samsung is using 70% of its DRAM capacity to produce HBM. Additionally, NAND Flash is a non-volatile memory technology mainly used for data storage. The technology is constantly evolving, with equivalent processes reaching 1x/1y nm level. Top manufacturers have achieved mass production at the 1znm level, with storage capacity continuously increasing. However, product supply is also in an oligopoly situation, with Samsung, SK Group, Kioxia, Micron, and SanDisk collectively holding 95.3% market share as of 2024 by revenue. NAND Flash and DRAM supplies are clearly monopolized by a few top companies, and with a high degree of overlap, scarcity in supply gives these companies high control over capacity and prices. In the fourth quarter of 2025, several manufacturers simultaneously raised the prices of both storage chips, with some raising the price of NAND flash contracts by over 50%. According to TrendForce data, on November 28th of the previous year, NAND flash contract prices saw a maximum jump of over 20%, and on January 12th of this year, prices for various products continued to rise, with MicroSD 64GB seeing an increase of nearly 10%. Looking at the demand side, the increasing iterations of large AI models are accelerating the popularization of AI applications in various scenarios, including enterprise entities and personal entities, both of which are emerging rapidly. For example, in 2025, AI PCs became the best-selling and fastest-growing model among PC products, with a penetration rate exceeding 50%. According to Gartner's data, the global shipments of AI PCs are expected to reach 114 million units in 2025, a year-on-year increase of 165.5%. Furthermore, AI applications have led to a surge in demand for high computational power servers, driving a doubling of AI server growth in the past two years, with a penetration rate of nearly 20% in 2025. According to Frost & Sullivan data, the global server market in 2024 was 16 million units, with AI servers accounting for 12.5%. It is expected that by 2030, the server market will grow to 19.5 million units, with AI servers accounting for 33.3%. The increasing penetration of AI applications in multiple scenarios is mainly due to the capital investments of global cloud service providers. TrendForce data shows that the eight major cloud service providers, including Google, AWS, Meta, Microsoft, Oracle, Tencent, Alibaba, and Baidu, had a combined capital expenditure of $260.9 billion in 2024, with a compound annual growth rate of 21.6% over the past four years, expected to reach $602 billion by 2026, a compound annual growth rate of 51.9%. Most of these capital expenditures are focused on AI servers and related AI fields. This means that the demand for AI applications is expected to continue to surge in the coming years. However, it is worth noting that for domestic AI intelligent terminal manufacturers, their dependence on a few oligopolistic players in the storage chip industry is quite high, making their production very passive. They not only have to consider costs but also the acceptability of price increases by consumers, leading some manufacturers to adjust their sales targets for the year. Nevertheless, the promising demand outlook is expected to accelerate domestic substitution, providing opportunities for the development of the domestic storage chip industry chain, as well as excellent investment opportunities for related stocks in A, Hong Kong, and US markets. Detailed analysis of A, Hong Kong, and US stocks, focusing on sector-leading blue-chip stocks Looking at the market value performance of storage chip stocks in A, Hong Kong, and US markets, it closely matches the timeline of the super cycle: starting in 2024, surging in volume in 2025, and accelerating in 2026. According to data from Oriental Choice, there are a total of 98 storage chip stocks in the A-share market, with the leading pure concept blue-chip stocks being Shenzhen Longsys Electronics (301308.SZ) and Infotmic Co., Ltd. Shenzhen Longsys Electronics' core products include embedded storage, solid-state drives, mobile storage, memory chips, widely used in mainstream consumer smart terminals (such as smartphones, wearables, computers) as well as data centers. The company successfully developed five SLC NAND Flash storage chips ranging from 512Mb to 8Gb by 2024, actively expanding its product line to cover MLC NAND Flash and NOR Flash for smaller capacity storage chips, as well as accelerating its layout of high-performance eSSD (PCIeGen 5.0) for enterprise applications. The company's revenue mainly comes from storage products, with a compound growth rate of revenue of 44.8% from 2022 to 2024. In the first three quarters of 2025, revenue increased by 26.12%, and its profit performance is also commendable, keeping pace with revenue growth. As a leading domestic storage chip manufacturer, it may be one of the biggest beneficiaries of domestic substitution. As of now, the company's PB valuation is 20.1 times, which is at a slightly higher level among the three major markets (Hong Kong, A, and US). Infotmic Co., Ltd is mainly engaged in the distribution of electronic components, including storage chips. At the end of 2024, it successfully obtained the agency rights for China's leading storage chip manufacturer, Yangtze Memory Technologies Co., Ltd. (YMTC). The product line achieved billion-scale sales in the first half of 2025. Yangtze Memory Technologies is a leading domestic storage chip manufacturer that achieved a breakthrough in 3D NAND Flash technology with its self-developed Xtacking stacking architecture, successfully iterating the 3D NAND Flash process and achieving continuous breakthroughs in production capacity. Infotmic Co., Ltd stands to benefit from the opportunities brought by Yangtze Memory Technologies' development. The company has maintained double-digit revenue growth in recent years, but its profitability is not remarkable, with three consecutive years of losses. It is projected to incur a loss of 97 million yuan in 2025. Due to its persistent losses and high debt ratio, the company is currently under significant business pressure, with an asset-liability ratio of 81.2% as of September 2025. However, it has significantly reduced its interest-bearing debt levels during the period. After the four consecutive gains, the company lacks long-term funds entering the market, resulting in higher speculative risks. According to data from Futu's market, there are 7 storage concept stocks in the US market, including Micron Technology, Inc., Seagate Technology Holdings PLC, Western Digital Corporation, and Silicon Motion Technology Corporation Sponsored ADR, among others. Micron Technology, Inc. and Western Digital Corporation are the two leading companies in the storage concept field. Micron Technology, Inc.'s main products include DRAM and NAND Flash, which have seen consistent high double-digit growth in performance over the past three years, while Western Digital Corporation has a diverse range of storage products covering cloud services, customer business, and consumer business, with slightly lower growth rates than Micron, but still maintaining high growth trends in 2025. Since 2025, Micron Technology, Inc. and Western Digital Corporation have maintained strong upward momentum in market value, with gains of 3.74 times and 4.42 times respectively. In terms of valuation, the PB values of these companies are 7.6 times and 14 times, with only PE values of 38 times and 35.6 times respectively, reflecting their high profitability. Both companies primarily target global markets, with a low proportion of revenue from the Chinese market, making their impact on domestic substitution weaker. With expectations of rising storage chip prices, there is still room for upward valuation for these companies. Pure storage chip stocks are relatively scarce in the Hong Kong market, with GigaDevice Semiconductor Inc. being the core target. It is one of the leading Fabless chip design companies in China, with its main products including storage, microcontrollers, sensor chips, and analog chips. In the NORFlash storage field, the company ranks second globally in market share, and first on the mainland, with a strong upward trend in the industry and a stable industry position. The company's storage chips contribute nearly 70% of its revenue, with overall performance matching that of the industry, achieving double-digit growth since the start of 2024. With revenue increases and higher product prices, its profitability has also seen significant improvements. Since 2025, its A-share market value has increased by 1.8 times, and since its listing on the Hong Kong stock market on January 13th, it has gained favor with investors, with a market value increase of over 80% in the first 8 trading days; its PB is currently at 10 times. Furthermore, companies in the upstream of the industry chain are also poised to benefit from the rise in storage chip prices and domestic substitution. Semiconductor Manufacturing International Corporation (00981) and HUA HONG SEMI (01347) are the two leading semiconductor foundry companies in Hong Kong, poised to benefit from industry development dividends. Both companies provide 8-inch and 12-inch wafers, mainly used in memory and power devices, with applications in smartphones, tablets, consumer electronics, industrial, and automotive fields. In Q3 of 2025, Semiconductor Manufacturing International Corporation surpassed a monthly wafer capacity of over 1 million wafers, with a capacity utilization rate exceeding 95%, while Hua Hong's capacity reached 468,000 wafers, with a long-term capacity utilization rate exceeding 100%. Despite the rise in storage chip prices, the performance of these two companies has shown some differentiation, with Semiconductor Manufacturing International Corporation maintaining double-digit revenue growth over the past two years, and significantly improving profitability in 2025, with a net profit margin of 11% in the first three quarters; Hua Hong's revenue growth has caught up, but its profitability is still poor, continuing to decline significantly in the past three years. However, driven by the downstream sector, both companies have seen good performance since 2025, with gains of 1.45 times and 4 times respectively, with PB valuations of 3.8 times. In conclusion, the storage chip industry has entered a super cycle, with a simultaneous increase in volume and prices becoming the norm in the context of supply scarcity and surging demand. This "quantity-price" rise is likely to drive continuous market size growth and performance surges for participants in the industry chain, providing excellent investment opportunities. Investors can focus on leading blue-chip stocks in the A, Hong Kong, and US markets, as well as outstanding performance targets. GigaDevice Semiconductor Inc., which recently listed on the Hong Kong stock market, has attracted high interest and has the potential to become a leading player in the Hong Kong storage concept sector.