Huatai Securities: If reports of Nvidia's chip memory downgrade are true, the short-term correction provides a good rebalancing opportunity for crowded trades
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Although the report indicates that the adjustment is driven by supply constraints from the three major original storage manufacturers, it has nevertheless sparked investor concerns about "AI storage demand peaking." On June 5, storage sector stocks in the US market, such as Micron, SanDisk, Western Digital, and Seagate, mostly declined. Based on analysis of relevant reports, we believe: 1) The downgrading of configurations is essentially a "result" of supply-side hard constraints on original manufacturer capacity allocation, not a "cause" of weakening computing power demand. If downgrading occurs, it will directly result in an estimated global DRAM demand decrease of approximately 1.6% in 2026 and 4.2% in 2027; 2) If the downgrading is confirmed, we still expect the storage supply-demand gap in 2027 to be around -7% before downgrading and around -3% after downgrading, with the upward cycle in storage remaining unchanged; 3) We believe the short-term pullback presents a good opportunity for crowded trades to rebalance.
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