Huachuang Securities: High growth in enterprise-level demand drives a new round of storage super cycle and optimistic storage price expectations for 25Q4 and '26

The Zhitong Finance App learned that Huachuang Securities released a research report saying that storage prices have recently risen across the board. Apart from the DDR4 supply contraction logic, it is mainly due to a recovery in data center construction momentum, and AI servers have greatly increased storage requirements, driving a new cycle of innovation, thus greatly increasing storage demand. With the construction of data centers and the improvement of single-cabinet storage configurations for servers, the bank is optimistic about storage prices in 25Q4 and '26.

The main views of Huachuang Securities are as follows:

Enterprise-level demand is growing, and storage prices are rising across the board

(1) DRAM: Server construction momentum is picking up, and the 25Q4 DRAM price increase is expected to rise. The withdrawal of DDR4 from overseas manufacturers has led to an increase in the DDR5 penetration rate in the PC sector. The server sector is receiving momentum from CSP construction. Demand for DDR5 products continues to increase, and DDR5 prices have risen steadily recently. DDR4 is mainly affected by the reduction in production capacity of the original factory. It has been more than half a year since the 24Q4 mainstream storage factory announced production cut/conversion to DDR4. As production capacity adjustments have evolved further, the price of DDR4 granules is in short supply and continues to rise. Looking ahead to 25Q4, Trendforce expects a significant increase in DRAM, and in October '25, Trendforce raised the 25Q4 DRAM price forecast due to the supplier's desire to raise the price after receiving an order. The estimated price increase for general DRAM was revised from 8-13% to 18-23%, and it is likely that it will be raised again. Looking ahead to '26, as server demand remains strong, DDR5 contract prices are expected to rise throughout 2026, especially in the first half of the year.

(2) NandFlash: Supply optimization & enterprise-level demand has risen, and prices have risen strongly. Driven by artificial intelligence applications and growing storage demand in the data center, client, and mobile sectors, SanDisk announced a price increase of more than 10% for all channels and consumer customers in September '25. Since September '25, under the dual drive of original factory control+price increase, the price of spot Flash Wafers has risen strongly. As of October 29, 2025, the price of 256 GB/512 GB/1TB of TLC flash memory increased 16.7%/61.3%/27.0% compared to September 2, '25. As prices at the granular end continue to rise, finished SSD products have been rising at the same time since September. According to Trendforce's forecast, due to supply optimization and rising demand for enterprise-grade SSDs, the 25Q4 NAND contract price is expected to rise across the board, with an average increase of 5-10%.

AI servers dramatically increase storage requirements and drive a new cycle of innovation

The wave of global data center infrastructure expansion is heating up. Among them, memory is a direct carrier for data storage, and capacity and performance are being upgraded simultaneously under large model iterations. The share of server NAND and DRAM applications has continued to grow in recent years, and has become the core engine for global storage market growth.

(1) DRAM: Demand for low-power memory is increasing, and the new production capacity of traditional DRAM was limited in '26. Data centers face the problem of how to reduce energy consumption while providing massive computing power, so a low-power memory architecture is an essential strategic priority for data centers. Nvidia's next-generation Grace CPU already uses LPDDR5X video memory with error correction codes to achieve server-level reliability while increasing energy efficiency by 5 times. In response to the demand for low-power DRAM in AI data centers, storage vendors are also actively expanding the application of low-power internal data centers. On the supply side, HBM is the core value growth engine in the DRAM industry. The revenue contribution per unit far exceeds that of traditional DRAM, and the gap is still widening. Therefore, the main original manufacturers have focused on expanding HBM production capacity for 26 years, and the additional production capacity of traditional DRAM is limited.

(2) NAND: Due to KVCache offloading & HDD crowding, NAND shipments may explode. To ensure the accuracy of model training, the amount of data required continues to grow, and multiple sources of modal data have been expanded. In recent years, the proportion of medium- to high-capacity ESSD applications of 8Tb/16TB and above has increased dramatically. Furthermore, PCIe 5.0 SSD can accelerate model deployment, and the penetration rate gradually increases. In addition to capacity and configuration upgrades, KVCache is used to cache historical token calculation results, improve computational efficiency by intelligently avoiding repetitive calculation processes, and is generally stored in GPU memory. The increase in KVCache capacity has exceeded the HBM load limit. Frequent memory spills may cause “memory fragments” in the inference process, forcing the GPU to perform repeated computations, causing delays and stuttering. Offloading KVCache to lower cost and more abundant memory levels such as DRAM and SSD has become the core strategy of the industry. Furthermore, HDD is the first choice for cold data in data centers, carrying nearly 80% of storage capacity. Since major HDD manufacturers around the world have not planned to expand production lines in recent years, nearline HDDs are seriously out of stock due to inference demand. Cloud vendors have begun to consider using SSDs to fill the HDD gap, causing high-efficiency and high-cost SSDs to gradually become the focus of the market. In particular, high-capacity QLCSSD shipments may explode in 2026.

Risk warning: the impact of price fluctuations in storage products, downstream demand falls short of expectations