Analysis of the Sustainability of the Storage Industry Cycle Reversal and Valuation Repair Potential

Based on the latest industry data and company announcements, I provide an in-depth analysis of the sustainability of the storage industry cycle reversal and valuation repair potential.

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According to the latest report from Counterpoint Research, the global storage industry has entered the

, with the current market even surpassing the 2018 historical high [1][2]. This is not a simple cyclical rebound, but a triggered by the AI computing power revolution:

Core Driving Factors	Specific Performance
AI Demand Surge	AI server memory demand reaches 512GB-1TB, 8-10 times that of ordinary servers; AI/server applications are expected to account for 66% of DRAM capacity in 2026 [1]
Structural Supply Contraction	Samsung, SK Hynix, and Micron are shifting ordinary DRAM production capacity to high-margin HBM, leading to a continuous expansion of the supply gap for traditional storage [2]
Localization Breakthrough	CXMT’s global share has risen to 3.97%, and Yangtze Memory Technologies’ 232-layer 3D NAND technology has caught up with international giants [3]

Time Node	64GB RDIMM Price	Quarterly Growth Rate
Q3 2025	$255	Baseline
Q4 2025	$450	+76%
March 2026 (Forecast)	$700	Another 55% Increase

• Q1 2026: Storage prices are expected to rise another
  40%-50%
  [1][2]
• Q2 2026: Expected to continue rising by
  approximately 20%
  [1]
• Some high-end modules may see a price increase of nearly
  175%
  within six months [1]

• Cloud computing vendors (the four major North American cloud providers) are expected to invest a total of
  $600 billion
  in AI infrastructure in 2026, with over 30% allocated to storage hardware [3]
• Lenovo’s CFO clearly stated: “By 2026, price increases are inevitable due to the overall upward trend in memory prices” [1]

• Storage packaging and testing factories are operating at nearly full capacity, and have raised testing prices by
  approximately 30%
  [1][2]
• It takes at least
  1.5 years
  to build and put a memory wafer fab into production, leading to slow release of new capacity [3]
• Tongfu Microelectronics plans to raise RMB 4.4 billion to invest in storage packaging and testing capacity, but cannot change the supply-demand pattern in the short term [1]

• Guotai Haitong Securities
  : This AI-driven storage super cycle has
  strong sustainability
  [1]
• iiMedia Research
  : Relevant rigid demand will continue to support market momentum, and the supply-demand gap may persist until
  2027 or longer
  [2]

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According to the company’s 2025 annual performance forecast [4]:

Indicator	2025 Forecast	YoY Change
Operating Revenue	RMB 10-12 billion	+49% to 79%
Net Profit Attributable to Parent	RMB 850-1000 million	+427% to 520%
Non-GAAP Net Profit	RMB 760-900 million	+1034% to 1244%

• Net profit attributable to parent is expected to be RMB 820-970 million,
  a quarter-on-quarter increase of 219%-278%
  [4]
• Excluding share-based payment expenses, Q4 net profit can reach
  RMB 860-1010 million

: The consensus analyst forecast for Q4 2025 net profit was RMB 325 million, and the company’s actual forecast far exceeded expectations [4].

Company	2025 Performance Forecast	Core Highlights
Biwin Storage	Net Profit +427% to 520%	High growth in AI edge computing + advanced packaging
Longsys	Q3 net profit YoY +1994% [3]	Leading storage module manufacturer, early layout of low-cost inventory
Allwinner Technology	Forecasted growth over 100%	-
GigaDevice	Forecasted growth over 40%	DRAM track layout
Montage Technology	Forecasted growth over 40%	DDR5 memory interface chips

Dimension	Data	Risk Warning
Industry PE	Over 150x [3]	Some popular targets reach 200-300x
PB of Some Companies	Dawei Co., Ltd. PB 12.06 [5]	Far exceeding the industry average of 3-5x
Longsys Dynamic PE	Once exceeded 200x [3]	Concerns about valuation overextension

• High performance growth digests valuation: Biwin Storage’s 2025 net profit surged more than 5x [4]
• Industry prosperity continues: Price increases are expected to persist until H2 2026 [1][2]
• Localization dividend: Significant industrial chain resonance effect [3]

• Valuations have fully reflected optimistic expectations and are running at historical highs
• If price increases fall short of expectations, or overseas giants restart production capacity, a sharp correction may occur [3]
• PB valuations of some companies are decoupled from fundamentals (e.g., Dawei Co., Ltd. PB 12.06 vs industry average 3-5x) [5]

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Judgment Dimension	Conclusion
Short-Term (H1 2026)	High certainty: Supply-demand gap persists, prices maintain upward trend
Mid-Term (H2 2026 - 2027)	High uncertainty: Depends on capacity release pace and AI investment intensity
Long-Term (After 2027)	Structural opportunities: AI demand continues, but need to pay attention to technology iteration risks

• The PE corresponding to 2025 net profit has dropped significantly, but needs to be combined with actual Q4 performance
• Current stock prices have reflected most price increase expectations,
  valuation repair potential needs to be treated cautiously
• Recommended focus: Progress in advanced packaging (wafer-level packaging projects), growth rate of AI edge computing business

• Some undervalued targets (e.g., Chengbang Co., Ltd. with a total market value of approximately RMB 4 billion, significantly lower than the industry average PE of 30-35x) still have repair potential [6]
• Need to be alert to correction risks for high-valued popular targets

Risk Type	Specific Content
Valuation Bubble Risk	Industry PE over 150x, popular targets 200-300x [3]
Capacity Expansion Risk	Centralized release of global capacity in 2026 may trigger price corrections
Inventory Backlog Risk	Extended trade chains, increased information distortion [3]
Marginal Demand Changes	Slower AI investment pace may change the supply-demand balance

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This cycle reversal in the storage industry has

, with the core driver being structural demand changes brought by AI, rather than a simple cyclical rebound. Prices are expected to maintain an upward trend in H1 2026, but .

For investors:

1. Short-term
   : Focus on leading companies with performance exceeding expectations (such as Biwin Storage), but control positions
2. Mid-term
   : Closely track capacity expansion progress and price trends, and be alert to valuation corrections
3. Long-term
   : Localization is the core theme, and the industrial chain resonance effect will continue

: The storage industry’s “super bull market” is still in progress, but at the current valuation level, it is recommended to focus on leading companies , and treat high-valued targets cautiously.

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[1] Securities Times - “Has the Storage Industry Entered a “Super Bull Market”? Terminal Products such as Mobile Phones and Laptops Forced to Raise Prices” (https://www.stcn.com/article/detail/3588428.html)

[2] Sina Finance - “Is the “Storage Super Bull Market” Fully Arrived? Prices Will Continue to Rise in 2026” (https://finance.sina.com.cn/stock/hyyj/2026-01-12/doc-inhfziuy0059185.shtml)

[3] Sinolink Securities - “Investment Insights | Up 18x in a Year! Why is the Storage Chip “Super Cycle” So Crazy” (https://cj.sina.com.cn/articles/view/5953190046/162d6789e06702j1yq)

[4] NetEase Finance - “STAR Market Evening News | Rongbai Technology Signs Over RMB 120 Billion Agreement with CATL” (https://www.163.com/dy/article/KJ6BTH0T05198CJN.html)

[5] East Money - “AI Analysis of Dawei Co., Ltd.” (https://caifuhao.eastmoney.com/news/20260108102955417873150)

[6] Investor Network - “Chengbang Co., Ltd.: Catching the Storage Super Cycle to Unlock Valuation Upside Potential” (https://news.pedaily.cn/20260106/121608.shtml)