Storage chip stocks have fallen over 20% in the past few weeks, facing a fundamental reassessment

OdailyOdaily reports that industry insiders indicate that historically in the storage chip industry, whenever a boom cycle occurs, manufacturers tend to simultaneously expand production capacity, leading to concentrated release of new capacity, a sharp price drop, and industry-wide losses. Subsequently, manufacturers collectively cut capital spending, and only when demand recovers does another boom cycle begin—a cycle that constitutes the industry's unique periodicity.

Since US storage chip stocks hit their peak in late June, news such as Meta selling computing power has sparked market concerns about an oversupply of computing power, triggering a collective downturn in storage chip stocks. Data shows that industry leaders including SanDisk, Micron Technology, Seagate Technology, and Western Digital have all seen their stock prices drop by over 20% in the past few weeks.

Analysts point out that the underlying logic currently supporting storage chip demand is facing a reassessment, with the core variable being whether the technological gap between major AI models will continue to narrow.

Analysts also note that the storage chip industry is undergoing a deep shift in its business model: in the past, storage was more like a commodity, with prices fluctuating according to market conditions, and contracts were mostly on a quarterly or annual basis. Now, cloud providers and AI data centers, in order to secure critical supplies, are increasingly signing long-term supply agreements with original manufacturers, lasting three to five years, with price bands, minimum purchase quantities, and customer deposits. (CCTV Finance)