DFZQ has released a research report stating that in Q1 2026, driven by robust AI demand and adjustments in original equipment manufacturer (OEM) capacity, storage prices continue their upward trend, with tight supply-demand conditions extending into the consumer electronics sector. Companies involved in supporting chips and modules for storage are set to benefit significantly from technological upgrades and simultaneous increases in volume and price. The report recommends focusing on investment opportunities across the entire domestic storage industry chain, including chip design, packaging and testing, and equipment. The report's key points are as follows: The recent IPO filing update from Changxin Technology shows revenue of 50.8 billion yuan for Q1 2026, with a net profit of 33 billion yuan and a non-GAAP net profit attributable to the parent company of 26.3 billion yuan. According to calculations, Changxin Technology's Q1 revenue grew 71% quarter-over-quarter. The company forecasts H1 2026 revenue between 110 and 120 billion yuan, a net profit of 66 to 75 billion yuan, and a non-GAAP net profit attributable to the parent company of 52 to 58 billion yuan. Tight supply-demand conditions in the storage market continue, supporting strong performance growth for manufacturers. While some investors are concerned that consumer electronics demand may face pressure, potentially impacting storage demand and future price increases, the report argues that robust AI-related storage demand is expected to keep storage prices strong. On the supply side, OEMs are prioritizing bit output for server-related storage products, which is likely to maintain a tight supply situation in the consumer electronics storage segment as well. According to TrendForce, Mobile DRAM contract prices continued to rise significantly in Q2 2026, with the average selling price (ASP) for LPDDR4X expected to increase by at least 70%–75% quarter-over-quarter, and LPDDR5X by 78%–83%. This strong price appreciation is expected to continue driving high earnings growth for storage manufacturers. Kioxia forecasts significant quarter-over-quarter growth in both revenue and profit for its FY26 Q1 (April-June), with projected revenue reaching 1.75 trillion yen, a 74.5% increase, and a Non-GAAP operating profit of 1.3 trillion yen, resulting in an operating margin exceeding 74%. Its Non-GAAP net profit is projected at 870 billion yen, with a net profit margin near 50%. Supporting chips related to storage are poised to benefit fully from overall market volume growth and generational upgrades. The market has previously focused more on storage chip manufacturers directly benefiting from price increases, overlooking the growth potential of companies producing related supporting chips. The report contends that these supporting chips stand to gain significantly from the overall expansion and technological evolution of the storage market. Domestic firms in related fields are continuously developing new products to drive their own growth. In the memory module sector, increased CPU usage in AI servers will boost demand for memory modules, benefiting chips like memory interface chips and SPDs. Chips such as MRCD/MDB are also expected to benefit deeply from the rising penetration of high-performance memory module standards like MRDIMM. Furthermore, VPD (Vendor Product Data) is likely to benefit from the volume ramp of CXL memory modules. In the solid-state drive (SSD) field, VPD is expected to benefit from the launch of next-generation EDSFF eSSD modules, while SSD controller chips are set to gain from increased volume and generational upgrades in enterprise SSDs. Several domestic companies have already established strong market competitiveness in storage-related supporting chips and are positioned to benefit substantially. Niche storage capacity is expected to remain under pressure from mainstream storage. Overseas OEMs continue to exit capacity for niche storage like MLC/SLC NAND. Samsung Electronics began phasing out 2D NAND production at its Hwaseong Line 12 in South Korea from March 2026, and Kioxia formally notified customers in March 2026 of its gradual exit from the 2D NAND market. Following these capacity exits, according to industry sources, the spot price for 64Gb MLC NAND has surged over 300% from late 2025 levels, with recent transaction prices reaching the $20 to $28 range. Looking ahead, niche storage capacity is likely to continue being squeezed by mainstream storage. Investment recommendations suggest continuing to seize the high-certainty growth opportunities within the storage industry chain. Relevant targets include domestic storage chip design firms such as GigaDevice, Puya Semiconductor, Gcore, Dosilicon, and Ingenic Semiconductor; companies benefiting from storage technology iterations like Montage Technology, Union Memory, and ASR Microelectronics; domestic storage module manufacturers including Longsys, DMEGC, Biwin Storage, and DapuStor; semiconductor equipment companies such as AMEC, KingSpec, Jingyi Equipment, Leadmicro, Piotech, and Naura; domestic packaging and testing firms like Shenzhen Kaifa Technology, Huicheng, and Tongfu Microelectronics; and supporting logic chip manufacturers such as Nexchip. Risks include slower-than-expected AI adoption, slower-than-anticipated technological iteration, and delays in domestic supply chain development.