J.P. Morgan: Storage Price Increase May Exceed Expectations, AI Cloud Providers Hoarding Inventory Intensifies Supply Shortage

BlockBeats News, June 22, JF Securities stated that the global semiconductor chip prices may rise significantly higher than market expectations. The reason is that cloud computing giants have secured production capacity in advance, AI server demand continues to expand, and major chipmakers still lack the willingness to ramp up production substantially.

In a global technology industry report released on June 21, JF Securities cited industry experts in the semiconductor field, predicting that storage prices in the third quarter of 2026 may increase by 40% to 50% QoQ, followed by another 30% to 40% increase in the fourth quarter. This forecast is significantly higher than the 15% to 20% previously expected by European and American investors and exceeds recent feedback from some Asian supply chains.

The report stated that excluding Chinese manufacturers, the global storage bit supply is expected to increase by only 7% to 8% in 2026, mainly due to process migration rather than new wafer capacity. The DRAM and NAND combined supply gap could reach 150,000 to 200,000 wafers per month. With a lack of clear wafer capacity growth in 2027 as well, the supply shortage may persist.

AI demand is the main driver of this storage cycle. The report pointed out that cloud service providers have signed two-year long-term supply agreements with chipmakers, paying about 40% in advance. These long-term agreements currently occupy about 50% of the industry's capacity and may rise to 70% in the future. In contrast, consumer electronics manufacturers are struggling to obtain similar agreements and may face greater cost and supply pressures from 2026 to 2027.

HBM is still in short supply. JF Securities cited experts' estimates that the industry's HBM capacity is about 330,000 wafers per month, which may increase to 480,000 wafers by 2027. Additional capacity will limit the price increase of HBM in the next 12 months, but the increase may still reach around 70%.

The report also believes that Chinese chipmakers will not pose a threat to this bull market in the short term. Yangtze Memory Technologies Co. (YMTC) still lags behind global leading manufacturers by about 1.5 to 2 generations in DRAM technology. In the absence of EUV capabilities, it is difficult for them to upgrade to DDR6 or HBM3E in the short term. Chinese manufacturers' expansion from 2026 to 2027 mainly impacts the low-end market. However, the report also pointed out that Chinese NAND technology may have stronger global competitiveness by 2028.

JF Securities warned that 2028 may be a cyclical risk point. If global wafer capacity grows by 15% to 20% at that time and AI demand slows down, storage prices may experience a sharp decline. However, from 2026 to 2027, the storage industry may still maintain strong pricing power, especially against the backdrop of cloud providers securing inventory and consumer electronics supply being squeezed.