CMSC: It is expected that the tight storage supply situation will continue throughout 2026. The overall outlook for industry chain companies is optimistic.

The CMSC report states that since the first quarter of 2026, prices of various storage products have risen sharply month-on-month. Currently, it is expected that storage prices will continue to rise this year and the trend of storage shortages will continue until 2027 due to limited global supply. In the resonance of prices and demand, this year, both domestic and foreign storage will usher in a year of performance release. The core focus will be on the sustainability of market price trends and performance growth of companies in various links. It is recommended to pay attention to companies related to the three core links of storage, equipment, and the industrial chain. Here are the main points of CMSC: - NVIDIA storage cabinets and DS Engram modules both demonstrate the trend of evolution of AI data center multi-level storage architecture, with NAND's importance in data centers becoming increasingly prominent. - Limited new storage capacity in 2026, with overseas factories releasing effective capacity lagging behind due to factors such as technology transfer. The supply-demand gap is expected to continue until 2027, with original factory inventory remaining tight, and downstream module manufacturers initiating strategic stocking to meet customer demand. Changes in the supply-demand structure further support the upward trend in contract prices in 2026, driving steady growth in the performance of companies in the industry chain. It is recommended to focus on overseas storage/domestic module/niche storage and upstream equipment/material companies in the industry chain. - Demand side: AI inference drives storage demand to double, with NAND becoming the foundation of data center capacity. - Industry side: NAND officially enters the era of ZB-level data, with data centers expected to replace mobile terminals as the single largest market. It is estimated that the share of server DRAM in 2026 will exceed 50%. In the medium to long term, the global storage bit demand CAGR will maintain at 20%, with the CAGRs of data center DRAM and NAND expected to reach 28.3% and 32.6% respectively from 2023 to 2030, far exceeding traditional terminal growth rates. - Supply side: Capital expenditure accelerated in 2026 but effective capacity release lagged behind. Supply-demand mismatch drives the global storage chain to maintain a seller's market. - Inventory side: The inventory of the industrial chain presents significant differentiation, with tight original factory inventory expected to persist throughout 2026. Downstream Taiwanese factories and Chinese mainland manufacturers are actively stocking up. Chinese mainland module manufacturers saw a record high 34% year-on-year increase in Q3 inventory to cope with the supply-demand gap in 2026. - Price side: The squeezing effect of AI capacity occupation leads to a continued expansion of the supply-demand gap, with a sharp increase in contract prices in 2026 Q1. - Sales side: The mismatch between supply and demand drives the volume and price of the entire industry chain to rise. Original factory LTAs lock in high growth, with the performance elasticity of middle and lower reaches accelerating towards release. Risks: - AI computing power capital expenditure below expectations, inventory impairment risks, international trade friction and supply chain fluctuations, intensification of industry competition, exchange rate fluctuation risks, risks of price decline.