Analyst Jukan: Storage and Computing Power Will Fluctuate in Sync, AI Demand May Support Storage

Analyst Jukan discusses the storage industry cycle, believing that computing power and storage will tighten or loosen in sync, and that a situation where there is a shortage of computing power while storage is in surplus cannot occur. He points out that the logic of shorting storage while going long on hard drives does not hold, as hard drives are tied to the storage cycle; if the cycle declines, hard drives will struggle to remain secure. Jukan states that the market lacks a clear judgment on trends after 2027, noting that historically, prices usually peak one to two quarters before supply expands, followed by shipment growth and profit pool contraction. He believes this cycle is different from those of personal computers, smartphones, and general-purpose servers, as the products used are not standardized and the triggering factors are different. Storage valuations are low, and some investors are still pricing based on past experiences, leading to market volatility. He expects that when storage prices decline, other demands will absorb supply at various price levels, with local AI demand expected to grow. If the storage prices driven up by large-scale cloud providers cannot be controlled, the spread of local AI will be limited. He anticipates that this AI cycle will shift from cutting-edge laboratories to local open-source AI, with the latter absorbing storage demand. Jukan also points out that storage prices will not remain high for over ten years and will eventually decline, but new consumer demands driven by open-source local AI may provide bottom support.

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