The NAND flash memory market is currently suffering from oversupply, leading to price declines and financial difficulties for suppliers. However, analyst firm TrendForce expects the supply and demand balance to improve significantly in the second half of the year. Key factors, according to TrendForce, include reduced NAND chip production, declining smartphone inventory, and growing demand driven by AI.
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Flash memory manufacturers have realized the serious impact of oversupply on the industry over the past two years, especially as the annual growth rate for flash memory demand has been revised from 30% to 10-15%. As a result, they have been forced to adjust their production strategies to mitigate the prolonged price decline.
Around 2025, NAND manufacturers have taken more drastic measures to reduce production, which are intended to quickly reduce market imbalances and lay the foundation for price recovery. In addition, China’s ongoing smartphone replacement subsidy policy is effectively stimulating smartphone sales and accelerating the depletion of NAND memory stocks.
Image source: TrendForce
Nvidia is set to ramp up shipments of its Blackwell series products in the second half of the year, which will significantly increase demand for enterprise SSDs. In addition, DeepSeek’s achievements in reducing the cost of deploying AI servers will enable small and medium-sized businesses to more actively integrate AI, increasing their competitiveness. SSDs with capacities greater than 30TB are expected to become the preferred storage solution due to their high performance and low TCO.
Additionally, the emergence of AI-enabled PCs and workstations will facilitate greater integration of AI into everyday applications, potentially leading to long-term growth in client PC SSD capacity. Reduced computing power requirements will likely accelerate the penetration of budget AI-enabled smartphones, further fueling demand for flash memory.