U.S. stock storage chip leader has fallen more than 20% over the past few weeks, and its underlying business logic is facing a revaluation

BlockBeats, July 11, according to CCTV Finance and Economics, industry insiders said that in the storage chip industry’s history, every time the market enters a boom cycle, manufacturers often simultaneously expand capacity, causing new capacity to be released in a concentrated way and prices to plunge, pushing the entire industry into losses; then the manufacturers collectively cut capital expenditures. When demand rebounds, they then face another boom cycle—this cycle forms the industry’s unique periodicity.

Since late June, U.S.-listed storage chip stocks have hit their highs. News such as Meta selling computing power has triggered market concerns about excess compute capacity, and storage chip stocks saw a broad pullback. Data show that among industry leaders such as SanDisk, Micron Technology, Seagate Technology, and Western Digital, their share prices have all fallen by more than 20% in the past few weeks.

Analysts noted that the underlying industry logic supporting storage chip demand is currently facing a reassessment, with the key variable being whether the technical gaps among each company’s AI large models will continue to narrow. Analysts also pointed out that the storage chip industry is undergoing a deep change in business model: in the past, storage was more like a commodity, with prices set by the market and contracts often signed on a quarterly or annual basis; now, cloud providers and AI data centers, to ensure critical supply, are increasingly signing long-term supply agreements with original equipment manufacturers—typically three to five years—with price bands, minimum purchase volumes, and customer security deposits.