AI siphons off the production capacity of the three major storage giants, and PC dominators such as HP seek help from China! The "chip prosperity window" has arrived in front of Chinese storage.

Media reported on Thursday, citing sources, that amid extreme global storage chip shortages threatening new product releases and raising operating costs for the entire tech industry, major global PC manufacturers such as HP Inc., Dell Technologies, Inc. Class C, Acer, and Asus are collectively considering sourcing storage chips or storage components from Chinese manufacturers on a large scale for the first time. The rapid construction of AI data centers has led to a scramble for storage chip capacity, causing skyrocketing costs for core storage components. Investors are increasingly concerned about the so-called "storage eating up consumer electronics profits," which is a core logic behind the recent pressure on the global stock market consumer electronics sector. Recent financial reports from global consumer electronics giants Nintendo and QUALCOMM Incorporated have highlighted that the severe shortage of storage chips and the significant price increase since the second half of 2025 not only threaten profit margins, but could also lead to significant reductions in overall production capacity and actual profits for consumer electronics product lines. High-performance storage products from China may serve as a "lifeline" for them, as the capacity of the three major DRAM/NAND storage chip manufacturers - Samsung Electronics, SK Hynix, and Micron - remains severely constrained and contract prices are soaring in the market. As HP Inc. and other PC manufacturers actively seek Chinese storage products, the global consumer electronics industry is facing an unprecedented severe shortage of storage chips - storage chips are essential hardware products that are necessary for PCs, Nintendo/Sony game consoles, high-end smartphones, and large-scale AI data centers such as "Stargate" that require long-term large-scale procurement. The essence of this wave of "storage chip rush" is that Alphabet Inc. Class C, Microsoft Corporation, and Meta, who are leading the construction of AI data centers, are "siphoning off" global memory/flash capacity and inventory, with the expansion of AI infrastructure driving up demand for server DRAM, LPDDR, and high-performance storage, Three major storage chip manufacturers and leaders in storage products are more inclined to prioritize supply to large AI data centers and other high-margin segments, squeezing the quota available to the PC and consumer electronics sectors and forcing OEMs to seek alternative sources. This is why manufacturers such as HP Inc., Dell Technologies, Inc. Class C are considering introducing Chinese storage chip supply chains for the first time because of the "global shortage of storage chips, rising costs, and potential disruption to new product releases." For these PC OEM manufacturers, the demand for storage chips or components mainly comes from the DRAM and NAND storage domains, but in this round of supply-demand mismatch, DRAM (especially PC DRAM/high-performance DDR5, as well as LPDDR5X) is at the "more scarce, continuously soaring prices and more affecting the overall machine cost and shipment pace" end; NAND/SSD is also rising, with enterprise SSDs being stronger, but the priority for PC manufacturers, especially PC DDR/SSD and NAND series storage chips, lag behind DRAM. The "storage shortage" sweeping the global consumer electronics industry Investors' current concerns about the "storage eating up consumer electronics profits" are not groundless. Video game giant Nintendo's stock price saw its largest drop in 18 months on the Japanese stock market on Wednesday. The company's latest financial results show that due to the rapid construction of AI data centers scrambling for storage chip capacity, core storage component procurement costs have soared, becoming a core factor in the dilemma of Switch 2 facing "increased revenue but not increased profit." Despite the growth in Switch 2 sales, hardware profits have been severely eroded. In addition, the company's low-price strategy in the Japanese market further dilutes profits, and the company's maintenance of full-year guidance and hardware sales targets (expecting shipments of 19 million units from June to the end of March) is also interpreted by the market as conservative. Due to the shortage of storage chips (mainly DRAM types), leading smartphone chipmaker Qualcomm's second-quarter revenue guidance indicates that smartphone chip revenue is expected to decline to about $6 billion, reflecting the direct suppression of smartphone shipment volumes by bottlenecks in the storage chip supply chain. The Qualcomm management mainly points to tight supply and significant price increases in storage chips, emphasizing the significant increase in storage demand from AI data centers, squeezing the supply and cost space of phone OEMs, resulting in some customers reducing inventory and channel stock, thereby dragging down short-term smartphone chip orders. In the video game consumer electronics category of companies like Nintendo and the smartphone category dominated by Qualcomm, DRAM (operational memory) and NAND (flash/internal storage) are both "unignorable" BOM cost items - and in the "storage price increase cycle" of 2026, the disturbance of the two on hardware gross margin is magnified. Storage chip manufacturers are reallocating production lines to the much more profitable HBM, to meet the almost "endless" demand for AI data centers. As HBM requires about three times more wafer capacity for the same storage capacity compared to standard DRAM, this shift significantly reduces the supply of storage products for the consumer electronics industry. This is a threat to PC, smartphone, and other consumer electronics manufacturers, as well as smaller consumer electronics companies facing capacity constraints and double-digit price increases, or massive profit compression. The three major monopoly storage chip manufacturers - SK Hynix, Samsung, and Micron - have all concentrated most of their capacity on HBM storage systems - such storage products require advanced process capacity and manufacturing and testing complexity much higher than DDR series and HDD/SSD series storage chips, thus the three major storage chip leaders continuously shifting capacity to HBM, to a large extent, causing a supply-demand mismatch for these hard disk storage products. Industry statistics show that since September 2025, the flagship storage product based on DRAM storage technology - the DDR5 series memory module has seen an overall price increase of over 370%, and the DDR4 memory module has also risen over 150%; DDR5 DRAM chips (such as the 16Gb DDR5 spot price) have soared by as much as 455% since September 2025. Industry research from Counterpoint Research and other institutions show that AI server systems demand for data center-level memory modules is at least 8-10 times that of normal server systems. Such a huge demand has seriously squeezed the capacity allocation of consumer-grade memory DDR series products. Top global cloud computing service providers, including Alphabet Inc. Class C, Microsoft Corporation, have thrown out huge purchase orders, even taking over part of the idle capacity of the three major storage chip manufacturers for the next 2-3 years. HP Inc. and other PC manufacturers turn to Chinese storage chip manufacturers for help For PC manufacturers like HP Inc., Dell Technologies, Inc. Class C, and Acer, in terms of the intensity and price of storage products, the current "most fiercely rising and most likely to bottleneck" is DRAM (especially the PC DRAM/DDR5/LPDDR5X chain) and NAND. TrendForce significantly revised its price outlook for the first quarter of 2026 on February 2: contract prices for regular DRAM are expected to rise by 90% to 95% on a month-by-month basis, and it is explicitly stated that PC DDRAM is expected to "at least double" in the first quarter of 2026 (i.e., an increase of more than 100% on a month-by-month basis); at the same time, NAND Flash contract prices are expected to increase by 55% to 60%, while the price of enterprise-level SSDs related to data centers is expected to increase by 53% to 58%. From the consumer electronics side (mainly PCs, smartphones, game consoles), the "main storage demand" for HP Inc./Dell Technologies, Inc. Class C/Acer/Asus essentially consists of two components: DRAM (system memory: DDR5 SO-DIMM/onboard LPDDR) + NAND Flash (system disk: Client SSD), with the current "most scarce and rapidly rising" storage sector skewed towards the DRAM side. This is also why media reports on Thursday, citing sources, suggest that HP Inc. and other major PC manufacturers have begun to certify Chinese storage chips from ChangXin Memory Technologies (CXMT) for non-US market PC manufacturing segments as a comprehensive expansion of storage chip supply alternative options. According to reports, the US-based PC manufacturer HP Inc. plans to closely monitor the specific supply situation of storage chips until mid-2026, and if the supply of Dynamic Random Access Memory (DRAM) related storage products remains tight and prices continue to rise, HP Inc. is likely to source DRAM storage components from ChangXin Memory Technologies for the non-US PC manufacturing market for the first time. Reports citing sources also indicate that another US PC manufacturer, Dell Technologies, Inc. Class C, is also certifying ChangXin Memory Technologies' DRAM series products, mainly out of concern that storage prices will continue to soar throughout 2026 and not matching supply will be available to meet PC manufacturing capacity. The reports further state that if Chinese contract suppliers actively purchase storage chips manufactured domestically, Acer also plans to adopt a more open attitude towards using such chips; sources added that another major PC manufacturer, Asus, has requested its Chinese production partners to assist in purchasing storage chips for some laptop projects. According to the latest disclosures, ChangXin Memory Technologies (CXMT) can fully meet the storage product needs of PC manufacturers in the DRAM product spectrum. Its official information disclosures have shown DDR5 (up to 8000 Mbps, maximum 24Gb die density, covering UDIMM/SODIMM/RDIMM, etc.) as well as LPDDR5X (up to 10667 Mbps, 12/16/24GB packages), and specifically targeting servers/workstations/PCs and flagship mobile devices.