Dongfang Securities: The sentiment of rising storage prices continues to heat up, maintaining a positive outlook on the domestic storage industry chain

According to the Zhitong Finance APP, Dongfang Securities released a research report stating that recently, Micron decided to suspend quotes for DDR4, DDR5, LPDDR4X, and LPDDR5X. The industry is rumored that Micron may significantly raise prices for channel storage products by 20%-30%. As the supply-demand balance gradually tilts towards the seller's market, prices for DDR4 and LPDDR4X have begun to rise since the second quarter and are expected to continue into the first half of next year. Meanwhile, due to the squeeze of HBM capacity and the transition between old and new processes, the supply of DDR5 and LPDDR5X is expected to tighten in the second half of the year, leading to a comprehensive price increase in the DRAM market. With manufacturers increasing investments in HBM competition and reducing niche DRAM capacity, domestic Tier 2 niche DRAM suppliers are expected to gain greater market space. Key points from Dongfang Securities: NAND storage price increase sentiment continues to rise Previously, SanDisk announced a price increase, and the upstream price increase news quickly heated up the industry and channel markets. According to CFM flash memory market data, last week, prices for different specifications of Flash wafers rose by 1.82%-6.25%; prices in both the SD channel market and the industry market rose comprehensively, with the SSD 256GB (industry market) seeing the highest weekly increase of 8.62%. The supply side has implemented price increase strategies for some NAND resources, significantly enhancing the urgency for industry customers to take delivery. Considering the rising stocking demand in the server NAND market in the second half of the year, it is expected that enterprise storage prices will continue to show an upward trend in Q4. The DRAM market may welcome a comprehensive price increase Recently, Micron decided to suspend quotes for DDR4, DDR5, LPDDR4X, and LPDDR5X. The industry is rumored that Micron may significantly raise prices for channel storage products by 20%-30%. As the supply-demand balance gradually tilts towards the seller's market, prices for DDR4 and LPDDR4X have begun to rise since the second quarter and are expected to continue into the first half of next year. Meanwhile, due to the squeeze of HBM capacity and the transition between old and new processes, the supply of DDR5 and LPDDR5X is expected to tighten in the second half of the year, leading to a comprehensive price increase in the DRAM market. The market is generally concerned about the sustainability of the DRAM price increase. The sustainability of demand driven by AI has been a key support for this round of DRAM price increases. Coupled with the irreversible trend of capacity switching on the supply side, this round of DRAM price increases has strong sustainability. Samsung's 12-layer stacked HBM3E passes NVIDIA certification, outlook for intensified competition among HBM manufacturers According to market media reports this week, Samsung's 12-layer stacked HBM3E product has successfully passed NVIDIA certification and officially entered its HBM supply chain system. Samsung's core goal is now focused on the next generation of HBM4 technology. According to official disclosures, relying on 1cDRAM technology combined with 4nm logic chip processes, the company has successfully developed HBM4 products with a data transmission rate of 11Gbps, becoming the first manufacturer in the world to achieve this benchmark. TrendForce expects SK Hynix to maintain its position as the largest supplier during the initial mass production phase of HBM4 supply. According to TrendForce, considering the threats posed by Instinct MI450 and "Helios," NVIDIA has recently made new requests to Vera Rubin component suppliers, hoping to quickly increase the speed of HBM4 from 8Gb/s to 10Gb/s Dongfang Securities believes that in the HBM4 era, Samsung is expected to achieve "synchronized layout" with SK Hynix and Micron, which may further intensify competition among original manufacturers. As original manufacturers increase their investment in HBM competition and reduce niche DRAM capacity, domestic niche DRAM Tier 2 suppliers are expected to gain greater market space. Target Aspects The storage market remains prosperous, with domestic advanced storage capacity continuously expanding. AI servers and AI terminals are expected to continue driving the growth of storage demand, while also benefiting from domestic substitution opportunities. Related targets in the storage industry chain include: Zhaoyi Innovation (603986.SH), Puran Co., Ltd. (688766.SH), Demingli (001309.SH), Baiwei Storage (688525.SH), Beijing Junzheng (300223.SZ), Langke Technology (300042.SZ), Dongxin Co., Ltd. (688110.SH), Jiangbolong (301308.SZ), Hengshuo Co., Ltd. (688416.SH), Wanrun Technology (002654.SZ), Shenke Technology (000021.SZ), TOYOU (300302.SZ), Juchen Co., Ltd. (688123.SH), and Lianyun Technology (688449.SH). Risk Warning Downstream demand growth may be less than expected; progress on original manufacturers' exit may be slower than anticipated