RISING TIDES
Observations from the IMC Research Process

Total Recall: Memory Becomes the AI Trade

AI set to consume more than half of global DRAM by 2027.

• AI’s Memory Multiplier:Behind every AI model is not just compute power, but an explosion in data creation and retention. Training large models and running real-time inference requires storing and moving vast amounts of data at lightning speed – cheaply, reliably, and at massive scale. That points to hard disk drives (HDDs) and NAND flash as the unsung heroes of the AI era.
• Supply Discipline Meets Demand Surge:After years of oversupply and underinvestment, manufacturers can’t add capacity fast enough. With cloud giants racing to expand data center footprints to support AI workloads, tight supply is creating the first multi-year upcycle in storage in decades.
• Storage Leaders Taking Center Stage: Seagate (STX) and Western Digital (WDC) dominate enterprise HDDs – the cheapest per-bit storage for hyperscale ‘cold data’. Samsung, Kioxia, Micron (MU) and SanDisk (SNDK) drive NAND flash, critical for faster-access SSD tiers. Additionally, as storage makers scale, tool demand for etch, deposition, metrology, and testing create a parallel upcycle for the equipment ecosystem: LAM Research (LRCX), KLA Corp (KLAC), and Advantest.

Compute stole the spotlight, but without storage the AI revolution stalls. For investors, the trade is shifting downstream, and the tide is only rising.