AI demand and production cuts to boost NAND prices in 2H25
The NAND Flash market remains oversupplied in early 2025, keeping prices low and pressuring suppliers. However, TrendForce predicts a rebound in the second half as AI-driven demand rises and production slows.
Key factors contributing to this shift include proactive production cuts by manufacturers, inventory reductions in the smartphone sector, and growing demand driven by AI and DeepSeek applications. These elements are expected to alleviate oversupply and support a price rebound for NAND Flash.
Since 2023, NAND Flash manufacturers have responded to oversupply challenges by adjusting production strategies, especially as annual demand growth projections have fallen from 30% to 10–15%. To counter prolonged price declines, suppliers have implemented stricter production cuts in 2025, scaling back full-year output to limit bit supply growth and stabilise the market, reports TrendForce.
China’s trade-in subsidy policies, introduced in late 2024, have boosted smartphone sales and helped clear NAND Flash inventories. With price declines slowing, smartphone brands may build up low-cost inventories in Q2 2025, further stimulating demand.
On the AI front, NVIDIA’s ramp-up of Blackwell-series shipments in 2H25 is set to drive enterprise SSD demand. Additionally, DeepSeek’s innovations in lowering AI server deployment costs will enable SMEs to adopt AI more efficiently, increasing demand for high-capacity SSDs (30TB+).
On the AI front, NVIDIA is set to ramp up shipments of its Blackwell-series products in the latter half of the year. This expansion is expected to significantly boost enterprise SSD demand. Furthermore, DeepSeek’s advancements in reducing AI server deployment costs will empower SMEs to integrate AI more effectively, enhancing their competitiveness. SSDs with capacities exceeding 30TB are projected to become the preferred storage solution for SMEs due to their superior performance and TCO benefits, thereby driving enterprise SSD demand.
In parallel, NVIDIA’s unveiling of Project Digits at CES, featuring 4TB SSD-equipped systems, is poised to accelerate AI adoption in personal computing and fuel increased demand for higher-capacity PC SSDs. The emergence of AI-powered PCs and workstations is expected to facilitate broader AI integration into everyday applications, potentially driving long-term growth in PC SSD (client SSD) capacities.
