Global storage giants surge collectively! What's the outlook for the future?

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In-depth Analysis of the 'Super Cycle' in Storage: Three Key Drivers Behind the New Highs

Storage stocks are skyrocketing! On May 6, 2026, South Korea's storage giants SK Hynix and Samsung Electronics reached new all-time highs; Hong Kong stocks $GIGADEVICE (03986.HK)$ 、 $MONTAGE TECH (06809.HK)$ also surged strongly, climbing steadily since their listing; overnight in the US market, $Micron Technology (MU.US)$ 、 $SanDisk (SNDK.US)$ 、 $Western Digital (WDC.US)$ and others also hit record highs.

A popular joke online recently asked, 'If you had bought storage stocks at XX, how much would you have made by now?' The editor decided to jump on this trend too.

If you read our article in 2025,'OpenAI Powers Up 'AI Applications'! Two Major Sectors, Compute Power and Storage, Enter a 'Golden Cycle'; This Investment Roadmap Is Worth Saving!', paying attention to US-listed storage concept stocks,

If you had bought SanDisk, your gains would be +1080.58%.

If you had bought WDC, you would currently be up +297.9%

If you had bought Micron Technology, you would currently be up +295.10%

If you had bought Seagate, you would currently be up +237.01%

This is just for entertainment purposes and does not constitute any investment advice~

BOCOM International Research believes thatthe global memory chip industry is currently experiencing the strongest upturn since the beginning of this century, with an intensity higher than previous cycles,and this upturn will last at least until the first quarter of 2027After long-term industry consolidation, the supply side has become highly concentrated. Combined with the structural demand increase brought by AI, both the sustainability and strength of this cycle significantly exceed previous ones.

After reaching new highs, is memory still worth following? This article will thoroughly analyze the logic behind the surge in memory:

I. Epic-level supply-demand mismatch triggers a super price hike cycle

Demand Side: AI ignites structural demand; token consumption reveals explosive growth.

The fundamental driver of this super cycle stems from the unexpected iteration and commercialization of large-scale AI models, which has generated exponential demand for data storage, processing, and retrieval.Storage chips, particularly HBM (High Bandwidth Memory), high-performance DRAM, and enterprise SSDs, have transitioned from their traditional role as data warehouses to become key 'bottleneck' components determining the efficiency of AI computing power.The demand for DRAM and NAND in a single AI server can reach several times that of a traditional server, directly initiating a super cycle of storage demand. Additionally, the explosive growth in token consumption is directly and immediately converted into massive demand for computing power and underlying storage resources, highlighting the authenticity and intensity of fundamental demand.

Supply Side: Capacity ‘Triple Squeeze’ and Expansion ‘Willing but Unable,’ Short-Term Rigidity Highlighted

In stark contrast to the surging demand, the supply side exhibits surprising 'rigidity' due to various constraints, with multiple obstacles impeding short-term capacity release.

After suffering severe losses during the previous cycle caused by excessive expansion, major manufacturers are exercising extreme restraint during this upturn. With limited total capacity, manufacturers are now focusing their resourceson high-profit product lines such as HBM and DDR5, which inevitablyseverely squeezes the production capacity for consumer-grade and general-purpose memory chips. This has caused the supply-demand gap to quickly spread from the AI sector to the entire memory market, triggering price increases across all categories.

Multiple market research firms predict,Overall, memory prices will continue the upward trend into 2026. This price hike, which initially started with high-end products such as HBM and enterprise-level SSDs, has spread to consumer-grade DRAM and NAND Flash. According to estimates by TrendForce and other institutions, the quarter-on-quarter increase in DRAM contract prices in the second quarter could exceed 50%, with an even more significant rise for NAND Flash. Citi's report further points out thatthe tight conditions in the memory market may extend the price hike cycle into 2027。

Secondly, tech giants are spending heavily, with leading stocks showing real profitability

Global tech giants are engaged in an unprecedented AI capital expenditure race. Meta, Google, Microsoft, and others have recently disclosed earnings reports that continue to raise expectations for AI-related capital expenditures.Bank of America Securities expects global hyperscale cloud computing capital expenditures to exceed $800 billion by 2026.In order to secure fundamental computing resources, these giants have signed long-term contracts with memory suppliers, further locking in limited production capacity.

US-listed memory giant $SanDisk (SNDK.US)$ has signed long-term agreements securing over 33% of its production capacity through fiscal year 2027, guaranteeing more than $11 billion in financial backing and $42 billion in minimum contractual revenue; its data center business surged 233% quarter-over-quarter.

Samsung Electronics' operating profit for the first quarter increased by 474.3% year-over-year, with quarterly sales surpassing 130 trillion won for the first time, a 68% year-over-year increase; operating profit reached approximately 57.2 trillion won, surging 755% year-over-year.

SK Hynix's net profit for the same period increased by 398% year-over-year, reaching 40.33 trillion Korean won, far exceeding analysts' expectations of 29.39 trillion Korean won. The average selling price of DRAM in the first quarter surged approximately 60% compared to the fourth quarter of last year; the average selling price of NAND in the first quarter rose about 70% compared to the fourth quarter of last year.

Third, memory stocks see explosive profit growth, but their valuations remain 'stagnant.'

Despite explosive earnings growth, the valuation of memory stocks remains relatively low, creating a significant valuation gap.As of April 2026, Samsung Electronics and SK Hynix’s 12-month forward price-to-earnings (P/E) ratios are only 6.0x and 5.2x, respectively, offering compelling profitability among global AI-related stocks. U.S. memory chip manufacturers also have forward P/E ratios below 10x.$Micron Technology (MU.US)$as well as$Kioxia Holdings (285A.JP)$In comparison, Taiwan Semiconductor trades at around 20x, and NVIDIA at approximately 22x.

This significant disparity is sparking intense debate on Wall Street. Bulls argue that AI-driven demand for memory has expanded from high-bandwidth memory to general products like DRAM and flash memory, with supply shortages and soaring prices coexisting, signaling a structural paradigm shift in the memory industry. Bears, however, maintain that memory profitability has historically fluctuated with economic cycles, and the low valuation reflects a reasonable pricing of this historical pattern, requiring more evidence for the market to assign a higher premium.

Mapping the Investment Landscape Across the Entire Supply Chain Through the Lens of the 'Super Cycle'

As previously discussed in the article "Pricing power reversal! Memory sector enters a 'once-in-a-lifetime' super cycle. Who is reaping the AI红利?As analyzed in a previous article, this wave of memory demand is not benefiting just a few original equipment manufacturers (OEMs).From upstream wafer fabrication, midstream packaging, testing, and equipment, to downstream modules, controller chips, and system solutions, every link in the chain plays an indispensable role in this cycle, presenting unique investment opportunities.

1. Upstream wafer manufacturing: The most direct 'beneficiary' of price hikes

This is the segment with the greatest elasticity and at the core of this super cycle. The rise in both volume and price of memory wafers (DRAM, HBM, NAND) directly translates into substantial profits for manufacturers. $CSOP SK Hynix Daily (2x) Leveraged Product (07709.HK)$ 、 $CSOP Samsung Electronics Daily (2x) Leveraged Product (07747.HK)$ 、 $Micron Technology (MU.US)$ 、 $SanDisk (SNDK.US)$ 、 $Seagate Technology (STX.US)$ 、 $Western Digital (WDC.US)$

2. Midstream packaging, testing & equipment: The 'hidden winners' behind capacity expansion

Although wafer fabs are cautious about expanding production, yield ramp-ups and structural upgrades for high-end products like HBM have significantly driven growth in packaging, testing, and equipment segments. $Lam Research (LRCX.US)$ 、 $Applied Materials (AMAT.US)$

3. Downstream design & systems: The 'bridge' connecting chips to applications

Memory chips ultimately need to be transformed into usable products and systems. Companies in this segment occupy key positions in the industry chain by mastering core IPs or controller technologies. $Rambus (RMBS.US)$ 、 $Silicon Motion Technology (SIMO.US)$ 、 $Marvell Technology (MRVL.US)$

4. System solutions: The 'final realizer' of memory value

In the era of data explosion, standalone memory hardware can no longer meet demands; enterprise storage systems and software-defined storage have become new growth areas. $NetApp (NTAP.US)$ 、 $PURE BIOSCIENCE (PURE.US)$

Memory stock 'arsenal': Besides individual stocks, which ETFs could benefit?

In the AI-driven 'super cycle' of memory chips, directly investing in leading stocks such as Samsung, SK Hynix, and Micron Technology can yield maximum elasticity but also comes with higher individual stock risks and research barriers.For investors seeking to capture industry beta returns while diversifying risks, ETFs provide an efficient and diversified "investment arsenal."

$Roundhill Memory ETF (DRAM.US)$ ：The world’s first 'pure storage' ETF, strictly screening companies with more than 50% of their main business revenue coming from HBM, DRAM, or NAND. As of early May 2026, its top three holdings are SK Hynix, Micron Technology, and Samsung Electronics, with a combined weight of nearly 70%. Since its listing, the ETF's scale has grown rapidly, surpassing $3 billion by early May, with year-to-date gains exceeding 80%.

$iShares MSCI South Korea ETF (EWY.US)$ ：Indirectly holding heavy positions in South Korea’s leading storage giants, Samsung Electronics and SK Hynix dominate the MSCI Korea 25/50 Index, with a combined weight consistently above 40% in EWY. In addition to these two storage giants, its top ten holdings also include Hyundai Motor, SK Square, Hanwha Aerospace, etc., benefiting from growth across other pillar industries of South Korea.

$Direxion Shares Etf Trust Direxion Daily So Korea Bull 3X Shs (KORU.US)$ ：Triple-leveraged bet on 'South Korea = Storage', when the South Korean market (primarily driven by Samsung and Hynix) shows a clear and strong short-term upward trend, KORU can deliver significant returns, with year-to-date gains exceeding 362%. However, volatility decay must be considered as it can erode principal quickly during volatile markets.

$VanEck Semiconductor ETF (SMH.US)$ ：One-stop investment in the global semiconductor ecosystem, not solely betting on storage but comprehensively covering leading global companies across the semiconductor design, manufacturing, and equipment value chain, capturing overall growth dividends of the semiconductor industry.

We are experiencing a supercycle for memory chips,Three key factors—the epic mismatch between supply and demand, the genuine profitability of leading stocks, and the divergence in valuation—are jointly supporting the strength and sustainability of this cycle.

However, investors also need to remain clear-headed:

1) The inherent cyclical characteristics of the storage industry have not completely disappeared; high capital expenditures could pose a risk of overcapacity in the future.

2) Current AI-driven storage demand continues to rise. If progress in large model technology falls short of expectations, there is a risk of reduced AI capital expenditure, which could impact demand.

3) Due to the sharp rise in storage prices, there are instances of speculative hoarding in distribution channels. If excessive speculation affects downstream demand, there is a risk of price declines.

4) Storage companies need to continuously upgrade and innovate their products; strategic missteps could lead to R&D failures.

Overall, the supercycle for memory chips is still ongoing, butwhile investors enjoy the benefits of high growth, they also need to closely monitor industry dynamics and manage risks effectively.

P.S.: Want to invest but struggling with timing? The 'Monthly Investment' feature can help you enter the market at regular intervals and fixed amounts, allowing you to seize the industry wave!

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