Why is it said that storage has "de-cycled"?

【Deep Dive】Storage chips are undergoing "de-cycling"—this could be the most important change in the next three years
Those familiar with semiconductors know that storage used to be labeled as "cyclical stocks"—rising prices, expanding capacity, oversupply, falling prices, cutbacks, and rising again. A cycle every 3-4 years, always repeating.
But this time, it's different.
Why?
First, the demand side has changed.
Previously, storage demand came from PCs and smartphones—consumers would cut budgets and delay upgrades. But now, demand comes from AI data centers—cloud providers no longer buy storage based on price, but "lock in capacity" to ensure computing power delivery. Amazon, Microsoft, and Google have already pre-ordered capacity for 2027. This isn't demand; it's a "arms race."
Second, the supply side is tighter.
Manufacturing HBM requires advanced packaging, with a ramp-up cycle of 2-3 years. Foundries cut capital expenditure during low periods, and now, even if they want to expand, they can't. SK Hynix just announced that capacity will double in the next five years, but it won't fully materialize until 2034—indicating extremely poor supply elasticity.
Third, the pricing model has changed.
Previously, storage was "spot pricing," with prices soaring and crashing. Now, more and more long-term supply agreements (LTA) are in place, with customers locking in prices and capacity. The pricing system is shifting from "volatility" to "predictability." UBS's upgrade of Micron's target price to $1,625 is based on the core logic that: once profit predictability improves, valuation shouldn't be based on cyclical stocks.
Where are the risks?
Any "long-term prosperity" could be disrupted by three things: 1) cloud providers slowing capital expenditure; 2) model efficiency improvements and declining memory demand per unit; 3) eventual supply release.
But from the perspective of mid-2026, these risks are still far away. The current core contradiction is only one thing: demand growth rate > capacity release rate.
This gap will last at least until 2027.
That’s why—storage is re-evaluating from a "cyclical stock" to a "growth stock."