Storage has fallen like this, but I am even more excited Storage stocks have recently fallen quite badly. After SK Hynix went public, its stock price continued to decline, followed by Micron and SanDisk. Samsung's profits increased 19 times, but the market sold it instead. A group of people started shouting 'storage cycle peaks'. But the more I look at it, the more I feel that this is not like the peak of a cycle, but more like the first big gasp after a crazy surge. Let's first clarify one thing: the storage demand brought by AI is not a market trend for one or two years. The normal cycle is characterized by a decrease in production capacity leading to price increases, and an increase in production capacity leading to price decreases, causing fluctuations back and forth. AI is different, it requires more memory for every step from training to inference, from data centers to edge devices. HBM、DDR5、SSD， All on this ship. In fact, this is not a mismatch between supply and demand in one or two years, but rather a restructuring of the entire industry. What is the current status of HBM? Seriously insufficient. NVIDIA AMD、 Broadcom, all companies that produce AI chips are competing for production capacity. When will the HBM orders for SK Hynix and Samsung be scheduled? There are different reports, but the "supply shortage" is certain. This shortage cannot be solved simply by shouting 'China's production capacity is coming'. 4/China's storage is indeed expanding, but don't exaggerate. Changxin and Changjiang Storage mainly focus on commodity DRAM and NAND. High end HBM involves 3D stacking, advanced packaging, EUV lithography, which cannot be caught up in just one or two years. The prices of DRAM and NAND may come under pressure, but Korean companies can still eat the HBM cake for a long time. The main source of profit for SK Hynix and Samsung is HBM. Valuation is really not expensive now. Samsung's Q2 operating profit was KRW 89.4 trillion, a year-on-year increase of 19 times. According to this quarterly annualized profit, PE is only 8 times. If DRAM prices continue to rise in the third quarter, this number will be even lower. Micron also experienced a drop. In 2019, Micron fell to over $30 and later rose to $150. The storage industry is frightening when it falls, and even more frightening when it rises. Because the profit margin is too high. 6/AI reasoning is the bigger variable. The training phase requires a large amount of HBM, while the inference phase requires HBM, DDR5, and SSD. ChatGPT、Sora、 Robots and autonomous driving, once these applications are scaled up, have an exponential demand for storage. The current decline cannot change this long-term trend at all. So the conclusion is very clear: This round of decline is caused by leverage trampling and profit taking in the Korean stock market, not a fundamental reversal. For long-term investors, this is a discount. Core targets: Micron (MU), SK Hynix (SKHY), Samsung. For hassle free recommendations, brothers can directly buy SMH semiconductor ETFs. Brothers, when the market is panicking, don't rush to follow. Calculate your own pullback tolerance and buy in batches. In a super cycle, the first major correction is often not the end of risk, but the beginning of opportunity.