Guotai Haitong: Compressing technology does not change the shortage of storage, long-term contracts and expansion are the main trends.

Guotai Haotong released a research report stating that storage is a strong cyclical industry, and historically the economic cycle often lasts for 3-4 years. This is also the reason why global manufacturers have been actively signing long-term contracts recently. Although Google's TurboQuant memory compression technology has disrupted the market, the company believes that in the short to medium term, the industry trend of storage shortage remains unchanged. This is because currently, the original equipment manufacturers' production capacity is almost fully booked, especially in the server sector. Additionally, Google's algorithm only targets the inference stage and is based on laboratory data. Even if implemented, it does not necessarily mean a contraction in demand. On the contrary, the reduction in inference costs may open up even greater market opportunities.