Storage chips are facing an exacerbation of supply-demand imbalance. Wedbush predicts that prices of some products will rise by more than 100%.

With the accelerated construction of artificial intelligence infrastructure, the storage chip market is facing an intensification of supply-demand imbalance. Wedbush's latest report points out that, driven by a surge in demand and tight supply, prices of some storage products are expected to increase by over 100%, significantly boosting industry prosperity. Analysts at Wedbush stated in their report released on Monday that prices of DRAM and NAND storage are rapidly rising, with price increases expected to reach "three-digit" levels by the first half of 2026, compared to the fourth quarter of 2025. Prices of DRAM are expected to increase by 130% to 150%, while NAND prices are also approaching this level, indicating that the storage market is entering a new strong cycle. The trend is believed to directly benefit major storage manufacturers, including Micron Technology, Inc. (MU.US), Seagate Technology Holdings PLC (STX.US), and Western Digital Corporation (WDC.US). Wedbush pointed out that while the market has anticipated the recovery of the storage industry, the extent of price increases exceeds previous market expectations, reflecting a significantly higher speed and intensity of demand improvement than expected. From the perspective of the industry chain, the explosion of AI computing power demand is becoming the core driving force behind the rise in storage prices. As data center and AI training demand grow rapidly, high-bandwidth storage and related components are in short supply, driving prices up along the entire storage industry chain. At the same time, HDD manufacturers have also started to raise future contract prices, reflecting expectations of continued tight supply. In terms of demand for computing power in the upstream sector, NVIDIA Corporation's (NVDA.US) expansion plans further confirm the industry's prosperity. The potential demand scale for just two AI systems, Blackwell and Rubin, is as high as $1 trillion, as stated by the company's CEO, Jensen Huang, at a recent GTC conference. Additionally, the company's collaborations with Amazon.com, Inc. (AMZN.US) and its priority guarantee in the supply chain also provide support for future demand growth in the next two years. The strong performance of demand is also reflected in regional markets. The Taiwan tech stock index rose by about 4% in February, with Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) also recording recent increases, showing a continuous improvement in the overall prosperity of the AI industry chain. However, the industry is increasingly cautious about the outlook for the traditional consumer electronics sector. Wedbush pointed out that, despite strong index performance, demand in the PC and smartphone markets remains weak, with the industry generally expecting a year-on-year decline of around 15% to 20% in shipments. Some manufacturers are performing well mainly due to their involvement in the server and AI supply chain, offsetting the impact of declining consumer electronics demand.