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$SNDK $SKHYNIX $MU Storage sector rebound: CPI is just a catalyst, AI demand is the main driver Recently, the storage sector has rebounded after a high-level pullback. The US July CPI rose 0.1% month-over-month and 3.4% year-over-year, with core CPI up 0.2% month-over-month and 2.5% year-over-year, all in line with expectations. The data did not bring a rate cut surprise but reduced the pressure for further rate hikes in September, pushing US Treasury yields down and leading to a valuation recovery in tech stocks. On the day CPI was released, Micron rose about 4.9%, and the Philadelphia Semiconductor Index increased about 2.5%. However, the CPI mainly affects short-term sentiment and valuations and does not directly change the supply and demand in the storage industry. The real support for the industry still comes from AI servers. Manufacturers continue to shift capacity toward HBM, server DRAM, and enterprise-grade SSDs, keeping traditional DRAM and NAND supply tight. TrendForce expects general DRAM contract prices to increase 13%–18% quarter-over-quarter in Q3, and NAND Flash to rise 10%–15%. It should be noted that the price increase trend continues, but the growth rate has started to slow. The consumer side, including PCs and smartphones, is nearing its limit for high-priced storage, with weak demand for client SSDs, mobile NAND, and consumer-grade DRAM. The storage market is shifting from "industry-wide price increases" to structural differentiation. For the foreseeable future, I remain moderately bullish on storage in the mid-term, but short-term volatility will be significant: SK Hynix and Micron benefit more from HBM and server DRAM; enterprise-grade SSDs still have AI data center demand support; consumer-grade NAND has relatively weaker certainty. #CPIInLineFedWatch #AIInfraEarningsWatch #Gold4400HavenBid