In the just-passed 2024 year, the storage market staged a “Game of Ice and Fire”: the recovery of the consumer electronics terminal market was slow, while AI applications continued to break through strongly. As a result, storage products entered a polarized development phase: demand for consumer storage was flat, while the market for high-performance and enterprise-level storage products was lively.
In the second half of 2023, storage manufacturers adjusted their production capacity based on market conditions in an attempt to improve the supply-demand relationship. By 2024, these capacity adjustments gradually took effect, with several storage companies returning to profitability in 2024.
However, the contract price trends in the memory market were not as smooth. Overall, in the first half of 2024, contract prices in the memory market continued to rise. In the second half of the year, due to changes in market demand, contract prices faced downward pressure. By the fourth quarter, DRAM saw its price increase narrow, while NAND Flash reversed and declined.
Looking ahead to 2025, the industry believes that although AI applications remain strong, driving demand for high-performance HBM and QLC SSD products, the consumer electronics market has not yet shown strong signs of recovery. The storage market may still face challenges in terminal demand, prices, and capacity.
1. The Recovery Momentum of Consumer Electronics Remains Uncertain
The three main applications of memory are smartphones, laptops, and servers. Among them, servers, driven by AI, are expected to experience new growth in 2025, while smartphones and laptops have been weak for the past year, and their market recovery momentum in 2025 remains uncertain.
In 2024, smartphone manufacturers adopted a cautious stocking strategy to avoid exacerbating inventory pressure. According to global market research agency TrendForce, in the third quarter of 2024, smartphone production increased by 7% quarter-on-quarter, reaching about 310 million units, flat year-on-year. From the perspective of peak season production, the third-quarter performance has not yet recovered to pre-pandemic levels, indicating that the global consumer market still lacks clear recovery momentum.
Looking ahead to the entire year of 2025, the industry believes that smartphone shipments may return to growth, but the future market outlook remains unclear.
In the laptop market, TrendForce data shows that in 2024, the global laptop market is affected by high interest rates and geopolitical factors, with a slow recovery in demand. The estimated total shipment for the year is 174 million units, up 3.9% year-on-year. In 2025, global laptop shipments are expected to grow by 4.9%, reaching 183 million units, with the commercial market likely to recover and an expected growth of over 7% in shipments. As for the consumer market, growth in consumer models is expected to slow down.
2. Both DRAM and NAND Flash Contract Prices Decline
The DRAM industry went through inventory depletion and price recovery in the first three quarters of 2024, but the price momentum weakened in the fourth quarter. According to TrendForce data, in the fourth quarter of 2024, the overall average price of DRAM is estimated to rise by 8% to 13%, a significant narrowing compared to the previous quarter.
The first quarter of 2025 is traditionally a slow season for DRAM, and the market will be influenced by the continued shrinkage in demand for consumer products such as smartphones. As a result, contract prices are expected to decline, with general DRAM (Conventional DRAM) prices forecast to drop by 8% to 13%, and prices for HBM products expected to fall by 0% to 5%.
Looking ahead to 2025, TrendForce believes that DRAM contract prices will decline, with a more significant drop expected in the first half of the year. The continued weakening of demand for consumer electronics will also impact DRAM price trends in 2025. If manufacturers fail to manage capacity adjustments effectively, the overall industry’s inventory depletion speed will slow down.
As for NAND Flash, in the fourth quarter of 2024, the overall contract price of NAND Flash products is expected to decrease by 3% to 8%. In the first quarter of 2025, NAND Flash suppliers will face challenges such as rising inventory and declining order demand. The average contract price is expected to drop by 10% to 15%. Among them, wafer price declines will narrow, and for module products, due to stable Enterprise SSD orders, the price decline is expected to be buffered. However, for Client SSDs and UFS, demand for consumer terminal products remains weak, and buyers’ purchasing intentions are conservative, leading to a continued price decline.
Looking ahead, the industry believes that, considering the oversupply in the market in the fourth quarter of 2024 and the first quarter of 2025, coupled with the unclear recovery of the consumer electronics market, flash memory demand bits will be significantly reduced. As a result, suppliers are starting to reduce capital support and decrease supply bits. With the reduction in production capacity, traditional peak season demand is expected to increase in the second half of next year, and NAND Flash contract prices may experience an improvement in the second half of the year.
3. NAND Flash Enters a Production Cut Phase?
Under the AI effect, the profitability and soaring market demand for HBM are becoming increasingly prominent, attracting storage manufacturers to heavily invest in production. As a result, the capital expenditure structure in the storage market has changed. To meet the demand for HBM, storage manufacturers are investing more in the DRAM field, which reduces investment in NAND Flash production.
Meanwhile, in response to changes in market demand, several major companies have indicated that they will reduce storage product output, with NAND Flash being the primary target of adjustments.
Micron Technology’s latest financial report shows that in the first quarter of fiscal year 2025 (ending November 2024), Micron’s NAND business declined by 5% quarter-on-quarter, mainly due to the continued decline in demand from markets such as smartphones, automobiles, and industrial sectors. In this regard, Micron’s Executive Vice President and CFO Mark Murphy stated that the company is taking swift and decisive actions to reduce capital expenditures and cut wafer production in its NAND business.
In addition, according to media reports, Kim Jae-joon, Vice President of Samsung’s Device Solutions (DS), recently stated that the company is reducing the output of general DRAM and NAND storage products to cope with the gradually declining market demand.
In December of last year, rumors began to spread that Kioxia would implement production cuts for NAND Flash in response to the decline in market demand and overcapacity.
4. Conclusion
The storage market is facing challenges such as weak terminal demand, declining contract prices, and production cuts due to overcapacity in some areas. However, the future of the storage industry remains promising: the strong growth of AI continues to bring unlimited development opportunities, and storage manufacturers are making every effort to adjust production capacity and drive the production of high-profit, high-performance storage products, aiming to continually improve supply and demand and drive the storage industry to develop upwards again.
Disclaimer:
- This channel does not make any representations or warranties regarding the availability, accuracy, timeliness, effectiveness, or completeness of any information posted. It hereby disclaims any liability or consequences arising from the use of the information.
- This channel is non-commercial and non-profit. The re-posted content does not signify endorsement of its views or responsibility for its authenticity. It does not intend to constitute any other guidance. This channel is not liable for any inaccuracies or errors in the re-posted or published information, directly or indirectly.
- Some data, materials, text, images, etc., used in this channel are sourced from the internet, and all reposts are duly credited to their sources. If you discover any work that infringes on your intellectual property rights or personal legal interests, please contact us, and we will promptly modify or remove it.