Recent research from Orient Securities (DFZQ) indicates that AI inference applications are poised to accelerate demand for storage chips, with some investors still underestimating the scale of this growth. The report highlights that AI-driven inference workloads will significantly increase active data storage needs, fueling rapid expansion in the storage chip market.
AI model inference requires frequent data access to generate high-quality outputs. For instance, Retrieval-Augmented Generation (RAG) technology enables large language models (LLMs) to retrieve relevant information from knowledge bases, involving intensive random read operations. Additionally, key-value (KV) caching is essential for speeding up LLM inference. These factors are reshaping storage architectures, boosting demand for high-performance active data storage.
Traditional hard disk drives (HDDs), still dominant in data centers, struggle to meet the high-speed read requirements of AI inference, creating opportunities for solid-state drives (SSDs) to expand their role. As AI adoption grows, storage chip demand is expected to sustain rapid growth.
Amid persistent supply shortages, China’s domestic storage leaders—Hefei ChangXin (CXMT) and Yangtze Memory (YMTC)—face a historic opportunity to scale production and gain market share. While their presence in DRAM and NAND markets remains limited, constrained expansion by global giants in commodity storage segments opens a window for domestic players.
Technologically, CXMT launched DDR5 products in November 2025, achieving mainstream performance parity in metrics like peak speeds. YMTC’s proprietary Xtacking architecture has enabled breakthroughs in 3D NAND. On the corporate front, CXMT completed IPO preparations in October 2025, while YMTC’s parent company finalized shareholding reforms in September 2025. Post-financing, both firms are poised for significant capacity expansion, benefiting upstream and downstream supply chains.
Investment recommendations include semiconductor equipment firms like AMEC (688012.SH), JingYi Equipment (688652.SH), and NAURA (002371.SZ); AI storage solution providers such as GigaDevice (603986.SH) and Ingenic (300223.SZ); and beneficiaries of storage tech upgrades like Montage Technology (688008.SH) and Longsys (301308.SZ).
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