Jefferies: Storage price increase may exceed expectations, AI cloud providers locking in orders intensify supply tightness

BlockBeats News, June 22 — Jefferies said that global storage chip price increases could be significantly higher than market expectations, because cloud computing giants lock in capacity early and AI server demand continues to expand, while major storage manufacturers still lack strong willingness to ramp up production substantially.

In a global technology industry report released on June 21, Jefferies cited opinions from storage industry experts, saying that storage prices in Q3 2026 may rise 40% to 50% quarter-over-quarter, and then increase another 30% to 40% in Q4. This forecast is clearly higher than the 15% to 20% that European and U.S. investors had previously expected, and it is also higher than recent feedback from parts of Asia’s industrial chains.

The report says that excluding Chinese manufacturers, global storage bit supply in 2026 is expected to grow only 7% to 8%, mainly due to process migration rather than new wafer capacity. The combined DRAM and NAND supply gap could reach 150,000 to 200,000 wafers per month. Since there is also no obvious growth in wafer capacity in 2027, supply tightness may continue.

AI demand is the main driving force behind this storage cycle. The report points out that cloud service providers have already signed two-year long-term supply agreements with storage manufacturers and paid about 40% of the prepayment. These long-term agreements currently occupy about 50% of the industry’s capacity and may rise to 70% in the future. By contrast, consumer electronics companies have difficulty obtaining similar agreements and may face greater cost and supply pressure in 2026 to 2027.

HBM is still in a shortage. Jefferies cited expert estimates that industry HBM capacity is about 330,000 wafers per month and could rise to 480,000 wafers in 2027. Adding new capacity will limit the price increase of HBM over the next 12 months, but the increase could still reach about 70%.

The report also believes that in the short term, Chinese storage manufacturers will not threaten this current bull market. Changxin Memory still lags behind global leading manufacturers by about 1.5 to 2 generations in DRAM technology. Without EUV capabilities, it is difficult in the short term to upgrade to DDR6 or HBM3E. Chinese manufacturers’ ramp-ups in 2026 to 2027 will mainly affect the low-end market. However, the report also notes that Chinese NAND technology may have stronger global competitiveness by 2028.

Jefferies reminds that 2028 could become a key point for cycle risk. If global wafer capacity growth reaches 15% to 20% at that time, and AI demand slows, storage prices could see a sharp pullback. But from 2026 to 2027, the storage industry may still maintain strong pricing power, especially in a context where cloud providers lock in supplies and consumer electronics supply is squeezed.