Weak demand and overproduction this year will push NAND suppliers to reduce production volumes

By the second half of January, TrendForce analysts were ready to make forecasts regarding the dynamics of the solid-state memory market this year. In their opinion, the segment will continue to experience pressure due to low demand and overproduction. Against this background, the largest market players will begin to reduce production volumes and create conditions favorable for further consolidation.

Image Source: Samsung Electronics

Technically, these measures will be expressed in reducing the level of utilization of existing production lines and delaying the transition to more modern technical processes. Demand for new smartphones and laptops is not so high, and in the corporate segment there is also a cooling in demand for solid-state drives. Secondly, NAND chip prices have been declining since the third quarter of last year, and suppliers are pessimistic about their dynamics in the first half of 2025. Low prices that persist on the market reduce the profits of manufacturers, forcing them to reduce production volumes.

Adding to the problems for the global market is the activity of Chinese memory manufacturers, who are rapidly increasing production volumes against the backdrop of the national import substitution policy. The products of Chinese NAND manufacturers turn out to be cheaper than foreign ones, which also drives down prices on the global market.

Many global flash memory manufacturers are preparing to reduce production volumes. Micron has already made the corresponding decision, Kioxia and Western Digital (SanDisk) are about to follow suit. Samsung, which has long resisted reducing production volumes under pressure from Chinese competitors, will also be forced to take a corresponding step this year. SK hynix and its sister company Solidigm resisted the crisis well last year at the expense of the corporate segment, but this year they will also have to reconsider their production plans.

TrendForce experts believe that such phenomena will increase the risks of certain suppliers leaving the market. In order to survive, NAND manufacturers will have to master more profitable memory technologies and differentiate their product line, trying to find specific niches with less competition.