Storage chips: The "Hunger Games" have begun, marking the start of a four-year upcycle

Driven by the insatiable demand for AI, the global storage chip market is entering an unprecedented "Hunger Games."

According to news from the Chasing Wind Trading Desk, JP Morgan analysts Jay Kwon, Sangsik Lee, and others stated in a recent report that the "memory hunger" trend led by cloud service providers is driving the entire industry into a phase of structural growth.

The report points out that the core driving force of this cycle comes from the enormous demand for high-performance memory due to AI computing, its impact has rapidly expanded from high-end high-bandwidth memory (HBM) to traditional DRAM and NAND flash memory. Market dynamics indicate that suppliers may struggle to meet all demand in the next 12 months, thereby supporting a continued rise in prices.

This industry shift is not limited to the price recovery in the DRAM market; the NAND flash market is also experiencing a strong rebound, partly due to a severe shortage of hard disk drives (HDD), forcing customers to turn to enterprise solid-state drives (eSSD).

As a result, JP Morgan has significantly raised its forecast for the global storage market, increasing the total addressable market (TAM) forecast for the global storage market from 2025 to 2026 by 6% to 24%, and expects the market size to reach nearly $300 billion by 2027.

HBM Leads, DRAM Welcomes Rare Long Cycle

The report clearly states that the DRAM market is entering an "unprecedented four-year pricing upcycle" from 2024 to 2027. This rare long cycle breaks the industry's past pattern of "boom and bust," with HBM serving as the stabilizer behind it.

The report predicts that by 2027, HBM will account for as much as 43% of the total value of the DRAM market. The high value and strong demand for HBM will effectively smooth out the cyclical fluctuations in traditional DRAM prices, thereby raising the profit baseline for the entire DRAM market.

The report believes that even if HBM3E products may see price reductions due to increased supply in 2026, the next-generation HBM4 will enjoy a premium of about 35%, making it unlikely for the average selling price (ASP) of mixed HBM to decline in 2026.

In terms of competitive landscape, SK Hynix is considered to be in a leading position in the HBM4 race, likely to obtain NVIDIA certification earlier than its competitors, which may allow it to capture over 60% of the market share. The report suggests that Samsung Electronics and Micron may compete for the remaining HBM4 orders.

Global Storage Market Size May Reach $300 Billion

The breadth of demand for storage chips is one of its core characteristics. In addition to the focus on HBM, demand is expanding towards more diversified applications, further exacerbating the supply tightness.

The report emphasizes that the SOCAMM2 memory module for NVIDIA's next-generation Vera CPU and the GDDR7 video memory for the Rubin CPX GPU will become new growth points driving DRAM demand.

The rise of AI inference, AI services, and edge AI applications requires general-purpose servers to upgrade their memory configurations to achieve lower latency and better power consumption performance Based on this, JP Morgan has significantly raised its forecast for the global storage market, increasing the overall Total Addressable Market (TAM) forecast for the global storage market from 2025 to 2026 by 6% to 24%, and expects the market size to reach nearly $300 billion by 2027.

The report predicts that by 2027, AI-related applications alone will account for 53% of the DRAM market TAM. In response to the surge in demand, storage chip manufacturers are expected to increase capital expenditures (Capex) by 7% to 12% from 2026 to 2027, with DRAM capacity expansion being a priority.

Strong Recovery in the NAND Market, eSSD as a Key Growth Point

After two years of underinvestment, the NAND flash memory market has also seen a strong pricing recovery.

The report analyzes that this shift is primarily due to the surge in demand for enterprise solid-state drives (eSSD). A key external factor is the supply shortage of traditional hard disk drives (HDD). According to media reports, the delivery cycle for some nearline HDDs has reached up to 52 weeks. This has led the nearline storage market, which was originally dominated by HDDs, to begin adopting eSSD on a large scale as an alternative.

At the same time, as AI models shift from training to inference applications, the requirements for data read speeds and latency have become higher, highlighting the structural importance of NAND.

JP Morgan expects that NAND prices still have room for further increases, with the blended average selling price expected to grow by 7% year-on-year in fiscal year 2026. The report also adds that while the demand for storage from AI inference is structural, its certainty is not as strong as that of HBM for GPU computing, thus maintaining a relatively cautiously optimistic view on the long-term prospects of the NAND market