The storage price rally will continue throughout the year! Related ETFs have increased by over 25% this year. Fund managers are optimistic about semiconductor opportunities.

Storage Chips Enter Seller’s Market!

Recently, SK Hynix shared its latest insights on the storage industry and company operations during a Goldman Sachs conference call. The company believes that the global memory industry has fully shifted to a seller’s market, with price increases expected to continue throughout 2026.

Currently, few public funds directly investing in leading storage companies like SK Hynix and Samsung Electronics are available. The Huatai-PineBridge CSI Korea Exchange China-Korea Semiconductor ETF is one of the few products in the market that has achieved cross-border deployment, with a year-to-date increase of 25.65%.

Additionally, funds focused on semiconductor investments in the A-share market have recently been active. Some public funds suggest that the storage expansion chain, centered on high-end semiconductor equipment, key components, and high-value consumables, may be one of the most visible directions for A-share semiconductor investments in 2026, offering more opportunities to contribute certainty and resilience to the market.

Storage Price Increases Expected to Continue Throughout 2026

Recently, SK Hynix shared its latest views on the storage industry and company operations during a Goldman Sachs conference call. SK Hynix believes that the global memory industry has fully shifted to a seller’s market, with price increases expected to persist throughout 2026.

The company revealed that current DRAM and NAND inventories are only about four weeks’ worth, and no customer can fully meet demand. More critically, the capacity for high-bandwidth memory (HBM) has already sold out in advance for 2026, and the severe shortage of standard DRAM is significantly increasing suppliers’ bargaining power. The industry chain has begun long-term contract negotiations to lock in future supplies.

SK Hynix attributes these developments mainly to two reasons: first, the explosive and sustained demand for memory from AI large models and high-performance computing, far exceeding industry expectations; second, the slow expansion of cleanroom space needed for memory chip manufacturing, limiting capacity ramp-up and creating a “demand-supply” gap. The company states, “This year, we cannot meet all customer demands, and continuous price increases are inevitable.”

It is known that SK Hynix is one of the world’s top three memory giants. Recently, the company released its financial report for fiscal year 2025 and Q4 ending December 31, 2025. The company’s revenue for FY2025 was 97.1467 trillion Korean won, operating profit was 47.2063 trillion won (operating margin 49%), and net profit was 42.9479 trillion won (net margin 44%), all hitting record highs. In Q4, revenue was 32.8 trillion won, operating profit was 19.2 trillion won (profit margin 58%), with quarter-over-quarter growth of 34% and 68%, respectively, setting quarterly records. FY2025 revenue increased by about 30 trillion won compared to FY2024, with operating profit doubling.

ETF Gains Surpass 25% Year-to-Date

Currently, few public funds directly investing in leading storage companies like SK Hynix and Samsung Electronics are available. The Huatai-PineBridge CSI Korea Exchange China-Korea Semiconductor ETF is one of the few products in the market that has achieved cross-border deployment, providing investors with an indirect channel to share in the current storage price rally.

Notably, the Huatai-PineBridge CSI Korea Exchange China-Korea Semiconductor ETF has gained 25.65% since the beginning of 2026 and reached a new net asset value high at the end of January. As of the end of 2025, the top ten holdings of this fund included Samsung Electronics (16.31% of NAV), SK Hynix (15.59%), Cambrian-U, SMIC, Hygon Information, North Huachuang, GigaDevice, Lianchuang Technology, Microchip, and OmniVision.

Many fund managers expressed optimistic outlooks on investment opportunities in the domestic semiconductor industry, especially regarding the cyclical recovery.

Pan Ming, Executive Director of Guolian An Equity Investment Department, stated that AI narratives are booming globally, and the A-share AI sector shows significant rotation characteristics. The previously leading AI infrastructure blue-chip stocks are weakening in the short term, with funds shifting toward niche tracks supported by performance and industry logic.

From the evolution of the AI industry, after AI infrastructure is implemented, it will inevitably move toward application closure, driving capital toward AI application endpoints. Over the past three years, the computer (software) sector has underperformed hardware, and with the first quarter’s earnings lull, there is potential for stock price elasticity. However, current earnings uncertainty is high, and the focus remains on narrative.

In terms of performance, more attention is given to semiconductor equipment tracks with both AI attributes and earnings certainty. On one hand, overseas storage price increases are driving capital expenditure expansion among storage manufacturers, with TSMC’s 2nm GAA process creating additional equipment demand, supported by clear industry logic. On the other hand, the strong performance of overseas semiconductor equipment stocks reflects sector fundamentals.

Xiao Ruojin, Fund Manager of Bosera Digital Economy Hybrid Fund, believes that the semiconductor industry is in the middle of an innovation cycle, early in the inventory cycle. Specifically, AI-related capital expenditure is expected to remain high through 2026. As large models and agents continue to develop, initial capital spending will enter a cash flow return phase this year, promoting deeper and broader AI innovation cycles. Therefore, AI is in the mid-stage of the innovation cycle. From a recovery perspective, traditional non-AI demand-driven markets such as consumer, industrial control, automotive, and communications are being squeezed by emerging AI demand, with capital expenditure increasingly focused on AI needs. This results in less emphasis on traditional demand, leading to greater price elasticity in traditional chips during inventory replenishment cycles, keeping the industry in early inventory stages.

Yang Weiwei, Manager of Great Wall Semiconductor Industry Initiatives Fund, highlighted three main directions: domestic computing power, benefits from wafer fab expansion, and military semiconductor sectors. Domestic computing power is the core growth driver of the current semiconductor industry, still in a competitive landscape that is yet to be settled. As related companies go public, opportunities for differentiated investments will emerge due to product cycle differences. Regarding wafer fab expansion, driven by AI’s push for advanced domestic processes, storage shortages, and “China for China” foundry demand, equipment, materials, and components have room for growth. In the military semiconductor sector, the industry remains at a low point, but the “14th Five-Year Plan” is expected to promote recovery; additionally, new demand from commercial aerospace may drive growth.

Jinxin Fund believes that the storage expansion chain centered on high-end semiconductor equipment, key components, and high-value consumables may be one of the most promising directions for A-share semiconductor investments in 2026, offering more opportunities for market certainty and resilience.

(Article source: Securities Times)