CITIC Securities: Continue to be optimistic about storage demand exceeding expectations, and the supply-demand imbalance will persist until the first half of 2027.

LootboxPhobia · 2026-03-07T01:55:00+00:00

CITIC Securities' recent research report indicates that the storage industry has performed exceptionally well, with demand expected to exceed expectations. The supply and demand imbalance is projected to persist until the first half of 2027. DRAM and NAND Flash prices are expected to rise, especially driven by AI demand in the NAND market. Meanwhile, Biyi Storage's first-quarter performance exceeded expectations. Risks include changes in market demand and intensified competition. The investment strategy is optimistic about storage module companies and design firms.

LootboxPhobia

2026-03-07 01:55:00

Abstract generation in progress

Bloomberg, CFM Flash Market, TrendForce

Recently, CITIC Securities published a research report on the storage industry, noting that since February, the performance and guidance of Kioxia have exceeded expectations, NAND contract prices increased in the first quarter, and domestic module manufacturer Baiwei Storage released a performance announcement for January-February that also surpassed expectations. This further confirms that the storage industry remains highly prosperous. The firm continues to be optimistic about storage demand exceeding expectations, expecting supply shortages to persist until the first half of 2027. Key recommendations include storage module companies with strong short-term performance growth, storage manufacturers, and design companies close to the original manufacturers.

Price Review as of February 2026 (Bloomberg, CFM Flash Market, TrendForce)

DRAM: After a significant month-over-month increase in January, February saw a slowdown in spot and contract prices. According to Bloomberg, mainstream spot prices in February ranged from -3% to +12% month-over-month; DDR5-8Gb / DDR4-8Gb contract prices increased by +4% / +8% month-over-month.
NAND Flash: Prices continued to rise rapidly in February, though the growth rate has become more moderate. Bloomberg reports that mainstream spot prices in February increased by +10% to +26%, and contract prices rose by +37% to +67% month-over-month.
Modules: In February, the spot prices for DDR4/5 memory modules remained flat, SSD prices increased by 0% to +13%, and portable storage increased by +10% to +25%; DDR5 module contract prices increased by +4% to +18%, while DDR4 prices remained stable; SSD prices increased by +6% to +18%. (Note: Due to significant fluctuations in the current spot market prices and shorter contract negotiation cycles, storage prices from different sources may vary.)

Price Outlook (TrendForce, March 2026)

DRAM: It is expected that traditional DRAM contract prices will increase by 90% to 95% in Q1 (not adjusted). By the end of February, South Korean media sedaily reported that Samsung Electronics and SK Hynix had notified customers that DRAM prices would continue to rise significantly in Q2. According to Taiwanese media “PCDIY!”, SK Hynix issued a price increase notice after the Spring Festival, with DDR5-26Q2 prices expected to rise by 40%.
NAND Flash: Due to strong demand from AI servers and severe supply-demand imbalance, manufacturers are eager to raise prices. The overall contract price increase for Q1 is projected to be 85% to 90% (previously expected 55% to 60%).
Niche Storage: For NOR Flash, Taiwanese manufacturers are gradually reducing capacity for small- and medium-capacity NOR Flash, leading to capacity convergence and improved supply-demand balance. We expect NOR Flash prices to continue rising in the first half of 2026, with overall Q1 growth exceeding 20%, and larger increases for small- and medium-capacity NOR. For SLC NAND Flash, overseas manufacturers such as Micron, Kioxia, and Samsung are gradually reducing supply. Under supply contraction, prices in the first half of 2026 are expected to approach those of mainstream TLC/QLC products.

Overseas Manufacturers’ Demand Outlook

SK Hynix: The company expects DRAM bit demand to grow by over 20% year-over-year in 2026, and NAND bit demand to grow by 15% to 20% (high teens). DRAM and NAND inventories are only about four weeks’ worth, and demand from all customers in 2026 will not be fully met.

SanDisk: The company expects data center bit demand to grow by over 60% in 2026.

Kioxia: The company forecasts long-term NAND market bit demand to grow at a CAGR of approximately 20%. HyperScaler LTA negotiations extend to 2027-28. The company’s guidance for FY Q4 2025 (CY Q1 2026) revenue growth is 55% to 72% quarter-over-quarter, exceeding market expectations.

Domestic Storage Manufacturer Performance Expectations

Baiwei Storage: The company expects revenue of 4.0 to 4.5 billion yuan in January-February, up 340% to 395% year-over-year; net profit attributable to shareholders of 1.5 to 1.8 billion yuan, up 922% to 1086% year-over-year; net profit after deducting non-recurring items of 1.35 to 1.6 billion yuan, and net profit attributable to shareholders excluding share-based payments of 1.53 to 1.83 billion yuan, surpassing market expectations.

Risk Factors:

Overseas CSPs’ AI CAPEX below expectations; weakening downstream demand in consumer electronics; storage price increases below expectations; intensifying industry competition; technological innovation risks; international trade friction risks, etc.

Investment Strategy:

Continue to be optimistic about storage demand exceeding expectations, with supply shortages expected to persist until the first half of 2027. Core recommendations: 1) Storage module companies with strong short-term performance growth; 2) Storage design companies, especially those close to original manufacturers.

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