NAND flash suppliers are seeing positive results from their production reduction strategies implemented in the fourth quarter of 2024, according to a report by TrendForce. As consumer electronics brands ramp up production in anticipation of potential U.S. tariff increases, demand for NAND flash products is surging. This uptick in demand is further fueled by inventory restocking efforts across various sectors, including PCs, smartphones, and data centers.
Looking ahead, NAND flash prices are expected to stabilize in the second quarter of 2025, with projections indicating a rise in prices for wafers and client solid-state drives (SSDs). Specifically, client SSD prices are anticipated to increase by 3% to 8% quarter-over-quarter (QoQ) as original equipment manufacturers (OEMs) resume production earlier than expected. This resurgence in production is partly driven by the impending end of support for Windows 10 and the launch of new-generation CPUs, which are likely to boost replacement demand for PCs.
The DeepSeek effect is also playing a significant role in this recovery, as it accelerates the adoption of edge artificial intelligence (AI), thereby increasing the demand for high-performance storage solutions. In China, the demand for client SSDs is particularly strong due to these technological advancements. However, the North American market presents a more polarized picture; while server brand orders have been weaker than expected, cloud service providers (CSPs) are ramping up their procurement in light of NVIDIA’s Blackwell platform beginning to ship. Consequently, enterprise SSD orders are expected to see slight QoQ growth in the upcoming quarter.
In an effort to manage inventory, some vendors have slashed prices on PCIe 4.0 SSDs by over 20% in the first quarter of 2025. This price reduction is part of a broader strategy to clear out excess inventory, but with suppliers adjusting their capacities and procurement orders increasing, enterprise SSD contract prices are projected to hold steady in Q2 2025.
Moreover, shipments of consumer electronics such as smart TVs, tablets, and Chromebooks are expected to rise in the second quarter of 2025. This increase is coupled with stable demand for mid-to-low-end smartphones in emerging markets, supported by subsidy policies in China, which have led to a noticeable uptick in eMMC orders. Despite previous oversupply issues that drove NAND flash makers into losses, production cuts have been implemented to rebalance the market. As suppliers aim to return to profitability, they have raised wafer prices for module makers, who are now less able to compete with low prices, easing the pricing pressure on original suppliers.
As a result, eMMC contract prices are projected to remain flat in Q2 2025. Meanwhile, the demand for UFS remains stable, bolstered by high-end smartphones and increasing storage requirements in automotive applications. However, overall NAND flash capacity adjustments have reduced UFS availability, leading to expectations that Q2 contract prices will remain unchanged from the previous quarter.
In the NAND flash wafer market, prices have reportedly hit bottom, and inventory restocking is underway. Both module makers and OEMs are increasing their procurement efforts, while the rebound in enterprise SSD demand is driving interest in high-end wafer products. With reduced wafer supply stemming from production cuts and new pricing strategies for high-layer NAND flash in response to recovering demand, Q2 NAND flash wafer contract prices are now expected to rise by 10% to 15%.
This comprehensive overview of the NAND flash market highlights the intricate interplay between supply chain adjustments, technological advancements, and consumer demand. As the market continues to evolve, it will be crucial for stakeholders to stay attuned to these trends to navigate the upcoming changes effectively.
