Nomura Securities has identified a severe supply shortage as the core issue in the global storage industry, driven by AI-related demand that has yet to peak. In its latest report, Nomura suggests that investor fears of oversupply are exaggerated, offering a potential opportunity to reassess storage sector valuations. The report highlights the lengthy cycle for semiconductor investments to translate into production capacity, with South Korea's significant investment expected to take 5 to 10 years to materialize. Additionally, the high-margin HBM is impacting general-purpose memory capacity, exacerbating the supply shortage. Nomura also addressed concerns about AI-related hardware demand, noting that Meta's recent decisions do not signal a downturn. Instead, the current shortage in computing power is pushing single-token prices upward, and Meta's entry is anticipated to stabilize these prices. The report underscores the ongoing structural demand growth driven by AI, suggesting that the market's reaction to potential oversupply is premature.