--- title: "CITIC Securities: Google's TurboQuant compression technology does not change the current storage shortage situation; long-term contracts and capacity expansion are the main trends" type: "News" locale: "en" url: "https://longbridge.com/en/news/281492751.md" description: "CITIC Securities released a research report stating that Google's TurboQuant memory compression technology has failed to change the trend of storage shortages. Despite the market being influenced by technology, the storage industry still faces strong cyclicality, with original factory capacity nearly saturated, especially in the server sector. Long-term contracts and capacity expansion have become the main trends to cope with price fluctuations and seize market share. The U.S. technology blockade has intensified, with related legislation ensuring that regulated chips do not flow into China" datetime: "2026-04-02T08:50:24.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/281492751.md) - [en](https://longbridge.com/en/news/281492751.md) - [zh-HK](https://longbridge.com/zh-HK/news/281492751.md) --- # CITIC Securities: Google's TurboQuant compression technology does not change the current storage shortage situation; long-term contracts and capacity expansion are the main trends According to the Zhitong Finance APP, Guotai Junan has released a research report stating that storage is a strong cyclical industry, with historical prosperity cycles typically lasting 3-4 years. This is also the reason why global manufacturers are actively signing long-term agreements recently. Google's TurboQuant memory compression technology is disrupting the market, but in the short to medium term, it does not change the industry's trend of storage shortages. Firstly, current manufacturers' production capacity is nearly fully booked, especially in the server sector. Secondly, Google's algorithm only targets the inference stage and is based on laboratory data; even if realized, it does not mean a contraction in demand. On the contrary, the decrease in inference costs may open up a larger market space. ## Guotai Junan's main viewpoints are as follows: **Storage: Hedge against cyclical fluctuations with long-term agreements and seize the prosperity cycle through capacity expansion** Biwei Storage announced a $1.5 billion long-term agreement order, to be delivered evenly over 8 quarters within 24 months (from Q2 2026 to Q1 2028), with a locked price to hedge against price fluctuation risks. Google has launched the TurboQuant memory compression algorithm, but it does not change the trend of storage shortages. The core reasons are that current manufacturers' production capacity is nearly fully booked, especially in the server sector, and Google's algorithm only targets the inference stage and is based on laboratory data; even if realized, it does not mean a contraction in demand. On the contrary, the decrease in inference costs may open up a larger market space. Kioxia, SanDisk, SK Hynix's Solidigm, and Cisco subscribed to Nanya Technology's private placement of 17.2 billion yuan to secure future DRAM supply. **Logic: Intensified U.S. technology blockade** On March 27, the U.S. officially passed the "Chip Security Act," requiring certain advanced semiconductors subject to export controls to be equipped with "chip security mechanisms," including location verification functions. The act aims to ensure that regulated chips do not "bypass" into China through technical means. **Wafer Foundry Testing: Three major wafer foundries disclose 2025 annual reports** SMIC is expected to achieve operating revenue of 67.323 billion yuan in 2025, a year-on-year increase of 16.5%; net profit attributable to shareholders is 5.041 billion yuan, a year-on-year increase of 36.3%; basic earnings per share is 0.63 yuan; gross margin is 21.0%, an increase of 3.0 percentage points year-on-year. The average annual capacity utilization rate is 93.5%, an increase of 8 percentage points year-on-year. Huahong's operating revenue in 2025 is expected to reach 17.291 billion yuan, a year-on-year increase of 20.18%; net profit attributable to shareholders is 377 million yuan; operating net cash flow is 5.065 billion yuan, a year-on-year increase of 40.38%. The overall capacity utilization rate reaches 106.1%. JCET is expected to achieve operating revenue of approximately 10.885 billion yuan in 2025, an increase of 17.69% year-on-year; net profit attributable to shareholders is 704 million yuan, an increase of 32.16% year-on-year; basic earnings per share is 0.36 yuan, an increase of 33.33% year-on-year. **Semiconductor Equipment: Surge in orders, industry benefits** SK Hynix has signed a semiconductor equipment contract worth 81.56 billion Korean won with VM, the only etching equipment supplier in South Korea. This contract value is equivalent to 116% of VM's total consolidated revenue for 2024. The cumulative related orders from SK Hynix and other storage manufacturers to VM have reached 224.6 billion Korean won. Wafer bonding company Qinghe Jingyuan has completed a strategic financing of 500 million yuan, led by Zhongwei Company and Futen Capital, with Beiqi Investment participating; Old shareholder Inno Fund continues to increase investment. **Risk Warning** Terminal demand fluctuations exceed expectations, international technology controls exceed expectations ### Related Stocks - [GGLL.US](https://longbridge.com/en/quote/GGLL.US.md) - [GGLS.US](https://longbridge.com/en/quote/GGLS.US.md) - [XSD.US](https://longbridge.com/en/quote/XSD.US.md) - [GOOG.US](https://longbridge.com/en/quote/GOOG.US.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [GOOGL.US](https://longbridge.com/en/quote/GOOGL.US.md) - [GOOW.US](https://longbridge.com/en/quote/GOOW.US.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [SMH.US](https://longbridge.com/en/quote/SMH.US.md) - [DRAM.US](https://longbridge.com/en/quote/DRAM.US.md) ## Related News & Research - [Google’s Run Faces Tight Risk-Reward as Earnings Loom](https://longbridge.com/en/news/284535773.md) - [Google is testing AI chatbot search for YouTube](https://longbridge.com/en/news/284283555.md) - [Alphabet's (GOOGL) $40B Anthropic Gambit: Why Google Is Doubling Down on Its Biggest Al Rival](https://longbridge.com/en/news/284085625.md) - [Google Photos uses AI to make the iconic closet from ‘Clueless’ a reality](https://longbridge.com/en/news/284614569.md) - [Brazil regulator approves deeper probe into Google's news content use](https://longbridge.com/en/news/283875055.md)