Morgan Stanley: Asian storage stocks have fallen by 15% to 25%, market pricing logic is shifting

Morgan Stanley stated on July 14 that Asian storage stocks have pulled back 15% to 25% over the past month, while the overall chip sector has been trading sideways. Three key variables determine the direction: CSP capital expenditure expectations are 30% to 37% above consensus, with the end-July earnings season serving as a verification window; LTAs ease fears of a downcycle, lifting price floors; and Yangtze Memory’s Fab4 and Fab5 each plan approximately 100,000 wafers per month in capacity. If capital expenditure discipline is maintained, NAND supply tightness could last until 2028. However, if capacity expansion accelerates, it would be the biggest oversupply risk. According to Morgan Stanley, the pricing logic for storage stocks is shifting from cyclical high volatility towards a structurally higher return, and companies with sustainable profitability will receive valuation premiums.