Recently, the storage chip market has experienced a new wave of price increases, with several leading storage companies announcing higher prices for some products. Domestic storage enterprises are also following suit by raising delivery prices. Just a month ago, the industry generally expected storage chip prices to begin rising in June or July this year. However, the price hike has arrived earlier than anticipated. Has the storage market entered a recovery phase?
01
Price Hikes Driven by Dual Forces of Supply and Demand
In early May 2025, Samsung reached an agreement with major clients to raise DRAM chip prices and noted that DRAM prices are rising across the semiconductor industry. This marks Samsung’s first DRAM price hike in a year. The specific increase varies by client, but the average rise has been confirmed: DDR4 prices will rise by 20%, and DDR5 by around 5%. Western Digital announced a price increase of over 10% for all products starting April 1. Micron not only indicated an 11% average price increase for new orders but also issued a price adjustment letter on March 25, projecting an increase of 10%–15%. SK Hynix also stated that spot prices for DDR5 and eMMC storage chips are expected to rise by around 12%.
Domestic companies are also keeping pace. Yangtze Memory’s retail brand Zhitai announced it would raise delivery prices from April, with an increase possibly exceeding 10%. The speed and magnitude of this round of price hikes have exceeded industry expectations. Experts point out that the main reason for this surge is significant changes on both the supply and demand sides of the storage chip market. Production cuts and the rise of new demand have jointly driven the market recovery and price increases.
Currently, production cut strategies among major companies are proving effective. At the beginning of 2025, due to continued sluggish shipments of key consumer electronics such as smartphones and laptops, suppliers were not optimistic about demand for the first half of the year. To avoid further profit erosion, NAND Flash giants including Micron, Kioxia, Western Digital, Samsung, and SK Hynix launched production cut plans, primarily by lowering operating rates and delaying process upgrades in 2025.
For example, Micron posted a net loss of $5.066 billion in fiscal year 2024. To address this, Micron began reducing NAND Flash production in September 2024 and plans to expand the reduction by up to 30%. Samsung also announced in November 2024 that it would reduce NAND Flash output by 15%–20%. These actions effectively controlled the NAND Flash supply, paving the way for a price rebound. As prices bottomed out and restocking began, module makers and OEMs ramped up purchases. The recovery of enterprise SSDs has further boosted demand for high-end wafer products. According to TrendForce’s latest research, NAND Flash prices are expected to rise by up to 5% quarter-on-quarter in Q2 2025. Prices of 3D NAND wafers are projected to increase by 10%–15%, while Client SSDs are forecast to rise by 3%–8%.
Additionally, the full-scale deployment of AI applications has become a key driver of storage chip demand. As AI technology penetrates various sectors, demand for storage chips is growing explosively, particularly in the AI server field. In Q2 2024, global server market revenue reached $45.422 billion, up 35% year-over-year. The share of AI servers within the overall server market continues to climb, now nearing 30%.
AI servers, the core hardware of intelligent computing centers, are designed to meet the high-performance demands of AI workloads. Large AI models require massive amounts of data for training and inference. After deep data mining, the results are delivered to general data centers. This leads to explosive growth in data volume and scheduling complexity, with denser internal data transmission in data centers and growing demand for storage products.
Li Jian, Manager of the High-Speed Digital Market Division at Keysight Greater China, stated: “Earlier AI models required low computing power and small models. Later came medium power and medium models. Today, the industry is working with truly large models and high computing power. A basic requirement for high computing power is high bandwidth and massive data exchange. Data centers typically use DDR4 or DDR5 products with speeds of 8.4GT/s. We expect upgrades to DDR6 or DDR7 in the future. Additionally, we’re likely to use HBM3, HBM3E, or HBM4, which will be an order of magnitude improvement over today’s DDR products.”
Furthermore, the rapid integration of AI into smartphones, PCs, and smart wearables is also driving the demand for higher-capacity and higher-performance storage chips. DRAM configurations in AI smartphones have reached 16GB, and AI PCs commonly feature 32GB of memory. Intelligent vehicles are also expected to adopt open-source large models, further increasing storage demand—key drivers of the storage market recovery.
02
Cyclical and Structural Changes Intertwined in the Storage Market
Over the past few years, the storage market has undergone a complex journey from downturn to recovery. Starting from Q3 2021, the market was hit hard—DRAM prices fell 57%, and NAND prices dropped 55%. This marked a nearly two-year downturn. The decline was mainly due to oversupply and weakening demand, creating severe supply-demand imbalance. Global economic uncertainty and saturation in the consumer electronics market further hurt end-device sales. In 2022, global smartphone shipments were 1.21 billion units, down 11.3% year-over-year, while global PC shipments fell to 292 million units, a 28.5% drop—the worst annual decline since 2009.
To reverse the trend, major storage chip manufacturers started cutting production. Kioxia and Micron initiated cuts in Q4 2022, and Samsung followed in Q2 2023. By September 2023, Samsung had cut NAND output by up to 50%, focusing on processes below 128 layers. SK Hynix further cut production by 5%–10% in the second half of 2023, while Kioxia cut capacity by 50%, and Micron reduced NAND capacity by 30%.
From the second half of 2023, the market began showing positive signs. The impact of production cuts became evident, and terminal demand started to recover. The storage chip market began emerging from the downturn. Between October and December 2023, spot market NAND Flash price indices rose by 40%. SSD products from Samsung, Western Digital, and Kingston saw price increases of 100 to 130 yuan. Demand data was also encouraging: from October 23 to November 3, 2023, PC sales rose 1.4% year-over-year, tablet sales increased 13.5%, and smartphone sales grew 10.2%.
In 2024, the global AI boom became a key factor driving explosive demand for storage. Coupled with ongoing recovery in terminal demand, the storage chip market accelerated its rebound. Industry sentiment improved, and price hikes widened. In Q1 2024, storage sales surged 86% year-over-year. DRAM contract prices rose by as much as 20%, and NAND Flash increased by 23%–28%. In Q2 2024, DRAM contract prices were revised upward to 13%–18%, and NAND Flash contract prices to 15%–20%, maintaining strong momentum. Top companies saw significant performance growth—Samsung’s operating profit in Q1 2024 jumped 931%, and SK Hynix’s Q1 profit exceeded 15 billion yuan, compared to a 13.6 billion yuan loss a year earlier.
However, in the second half of 2024, the storage chip market experienced turbulence. After widespread price increases in the first half, prices sharply declined in the second half. From Q3 2024 onward, storage prices fell quarter by quarter, and the decline intensified in Q4. Consumer storage product prices dropped by up to 30%, and enterprise-level storage products fell 10%–20%. Companies like Samsung, Micron, SK Hynix, and Western Digital continued to implement production cuts, but DRAM and NAND prices kept falling—particularly for mature nodes like DDR4 and LPDDR4X. However, HBM prices soared by 500% riding the GPU boom, with expanding market share. New-generation storage chips such as LPDDR5x and DDR5 also helped buffer the market decline.
Domestic players like Yangtze Memory and CXMT leveraged their local supply chain responsiveness and technological breakthroughs to gradually increase their market share in China. They are also actively expanding overseas. Through differentiated competition strategies, they are securing a place in the global storage chip market.
By 2025, the storage market is gradually entering a recovery phase. Experts believe that over this five-year period, the market has been shaped not only by traditional cyclical fluctuations but also by structural changes driven by emerging demand such as AI. Although short-term volatility remains complex, in the long term, the storage market may not strictly follow past cyclical patterns. Instead, it is entering a new phase where cyclical and structural changes intertwine, with cyclical traits potentially weakening or evolving.
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