CITIC Securities: Bullish on Market Share Gains for Domestic Storage Leaders

China Securities pointed out that a nationwide strike at Samsung Electronics could lead to production halts and worsen the global supply shortage of storage chips. Amid the high demand in the storage market, they are optimistic about domestic storage giants increasing their market share. During the “14th Five-Year Plan” period, domestic storage companies are expected to accelerate capacity expansion and technological upgrades, benefiting core material and component suppliers in the industry chain.

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Semiconductor Materials | Samsung’s Planned Strike May Worsen Global Semiconductor Supply Shortages; Focus on Domestic Storage Industry Chain Key Suppliers

Samsung Electronics may hold a nationwide strike, risking production halts and intensifying the global storage chip supply shortage. Given the high demand in the storage market, we are optimistic about domestic storage giants increasing their market share. During the “14th Five-Year Plan,” capacity expansion and technological upgrades at domestic storage companies are expected to accelerate, providing full benefits to core material and component suppliers in the industry chain.

▍ Samsung Electronics’ potential nationwide strike could occur in May, increasing the risk of production halts and tightening global storage chip supply.

According to Yonhap News Agency on March 18, Samsung Electronics union members approved a collective action proposal with 93.1% support. The union plans to hold a rally on April 23 and conduct an 18-day nationwide strike from May 21 to June 7. If the strike occurs as scheduled, it could impact Samsung’s chip production lines at the Pyeongtaek Semiconductor Complex in South Korea, affecting the output of DRAM, NAND flash, and HBM chips. Once production lines halt, restarting and re-testing the manufacturing process will be time-consuming and resource-intensive. Since 2026, driven by strong AI demand, storage chips remain in tight supply, with prices continuously rising. According to Omdia data, Samsung Electronics held a 36.6% share of the global DRAM market in Q4 2025, and TrendForce data shows a 28% share of the global NAND market in Q4 2025. The potential production halt risk at Samsung could further exacerbate the global storage chip supply shortage.

▍ Domestic storage giants’ capacity expansion and technological upgrades are accelerating, with continued growth in market share expected.

We believe that the rise in storage prices and high market demand will continue throughout 2026. The potential total strike at Samsung Electronics also presents an opportunity for domestic storage giants to expand their market and increase market share. In terms of capacity and volume, according to Omdia data, Changxin Technology has become the fourth-largest DRAM manufacturer globally based on shipment volume, with a 3.97% market share in Q2 2025 based on sales revenue. In recent years, domestic storage companies have made rapid progress in capacity building and technological breakthroughs. Domestic 3D NAND products achieved mass production of 232-layer flash memory in 2025 and continue to develop towards higher stacking layers. Domestic DRAM products have achieved mass production of mainstream fourth and fifth-generation DDR4, DDR5, LPDDR4X, LPDDR5/5X, etc. We believe that capacity expansion and technological upgrades at domestic storage giants are likely to accelerate during the “14th Five-Year Plan,” with their global market share expected to continue rising.

▍ Growing demand for semiconductor materials, with a focus on core suppliers of storage giants.

Amid global shortages of storage products, rising prices and profitability, low domestic market share, and strong domestic industry policies, we are optimistic about the demand growth driven by storage giants’ expansion. The growth potential and upward space for core material and component suppliers are highly certain. Additionally, from a technological perspective, future 3D storage devices will significantly increase the demand for semiconductor materials used in wafer manufacturing, including thin film deposition, CMP, etching, and electroplating, all of which will benefit. Material consumption will see additional gains with process improvements and technological iterations. We are optimistic that domestic storage giants will become important demand drivers for semiconductor consumables, emphasizing the importance of core industry chain suppliers.

▍ Risks:

• Unexpected changes in Samsung Electronics’ nationwide strike
• Domestic major manufacturers’ expansion progress falling short of expectations
• Industry demand shrinking
• Slower-than-expected progress in domestic substitution
• Increased restrictions on China’s semiconductor industry by overseas governments
• R&D and product launch delays at companies

▍ Investment Strategy:

The potential nationwide strike at Samsung Electronics could lead to production halts and worsen the global storage chip supply shortage. Given the high demand in the storage market, we are optimistic about domestic storage giants increasing their market share. During the “14th Five-Year Plan,” capacity expansion and technological upgrades at domestic storage companies are expected to accelerate, benefiting core material and component suppliers in the industry chain.

(Source: People’s Financial News)