NAND flash manufacturers to cut production in 2025
The NAND Flash industry will continue to struggle with weak demand and oversupply in 2025, according to TrendForce. To address this, manufacturers like Micron, Kioxia/SanDisk, Samsung, and SK hynix/Solidigm plan to cut production, which could lead to further industry consolidation over time.
TrendForce states that NAND Flash manufacturers are primarily implementing production cuts by lowering their utilisation rates and delaying process upgrades. These actions are – according to the analyst firm – driven by three major factors.
Firstly, core consumer electronics like smartphones and notebooks continue to suffer from sluggish shipments. Additionally, slowing corporate IT investments are dampening growth in enterprise SSD demand.
Secondly, NAND Flash prices have been in decline since 3Q24, and suppliers remain pessimistic about demand in the first half of 2025. The prolonged price weakness risks further eroding profit margins, thereby compelling manufacturers to reduce output.
Lastly, Chinese suppliers are aggressively expanding production thanks to domestic substitution policies, intensifying global market competition.
Several NAND Flash manufacturers are cutting production to address market challenges. Micron has already announced its plans, while Kioxia and SanDisk are preparing similar measures. These two companies, lacking the added revenue from DRAM products, are likely to face greater financial strain than their competitors, Trendforce reports.
Samsung, despite leading in enterprise SSDs, is struggling with rising inventories due to tougher competition in China and the adoption of new technologies. It also plans to cut production this year.
SK hynix (including Solidigm) has performed well in the enterprise SSD market but is also affected by weak demand, prompting adjustments to its production.
While production cuts may stabilise prices in the short term, higher prices could increase costs for manufacturers and reduce consumer demand. In the long term, TrendForce believes that these cuts might drive industry consolidation, forcing weaker players out. To stay competitive, manufacturers must focus on innovation, product differentiation, and niche markets.
