The chip frenzy triggered by AI is rapidly spreading from logic chips like GPUs to the storage chip sector. Morgan Stanley believes that the storage market, especially NAND flash, is currently in the “early stage” of a prolonged upward cycle.
On September 23, Wall Street Journal mentioned that due to the strong demand for storage driven by AI data centers, Samsung has significantly raised NAND product prices this week, with DRAM products increasing by as much as 30%, and delivery times extended from one month to over six months. Competitors like Micron and SanDisk are also following suit with price increases.According to Hard AI, Morgan Stanley released a research report on the same day indicating that the AI-driven chip investment frenzy is spreading from GPUs to the storage sector. The report emphasizes that the current market is at a critical turning point in the cycle, with a recovery period expected after a double bottom in storage prices by 2026.Morgan Stanley believes that compared to the widely watched DRAM memory and mechanical hard drives, the flash memory market shows more significant upward potential due to the drastic shift in its supply-demand dynamics.
According to Morgan Stanley’s analysis, the semiconductor industry, especially in the memory sector, is at a critical turning point in the cycle. Historically, the Philadelphia Semiconductor Index (SOX Index) has shown a cycle of moving from “euphoria” to “pessimism” and back again, and the current market is in the “optimistic phase”.
The charts in the report show that the storage chip cycle has decoupled from the logic chip cycle in the AI era, but is now showing signs of catching up.
Investment RecommendationsInvestment Recommendation: We believe that the demand for NOR Flash has been weak since the second half of 2024, but with the increasing demand from AI data centers and the gradual recovery of the automotive market, the supply-demand balance in the NOR Flash market is expected to improve, making timely price increases a necessary trend. NOR Flash prices are expected to rise to double-digit percentages in Q4 2025, potentially continuing until 2026.Related Concepts: Storage Chips, SemiconductorsRelated Companies: 002208 Hefei Urban Construction, 000890 Farsens603776 Yong’an Travel, 603324 Shengjian TechnologyRisk Warning: AI application development may not meet expectations; storage supply chain price increases may not meet expectations; internet companies may reduce capital expenditures or be less proactive; customized storage implementations may not meet expectations.Reference Materials: Zhongyin Securities 0923 Storage Industry Tracking Report, Su Lingyao, Wall Street Journal
