TrendForce’s latest analysis highlights that the NAND Flash market continues to face oversupply in the first quarter of 2025, driving prices downward and creating financial challenges for suppliers.
However, a notable improvement in supply-demand is expected in the second half of the year, as production adjustments and rising demand begin to take effect. NAND Flash manufacturers have taken proactive measures, including aggressive production cuts and inventory adjustments, to counteract the prolonged market imbalance. Since 2023, the industry has seen NAND Flash demand growth forecasts drop from 30 percent to 10-15 percent, prompting suppliers to recalibrate their strategies to stabilize prices.
Entering 2025, these efforts have intensified, with manufacturers scaling back production further to restrict bit supply growth. At the same time, China’s trade-in subsidy policies, introduced in late 2024, have spurred smartphone sales, accelerating NAND Flash inventory depletion. As price declines slow, smartphone brands may leverage the situation in the second quarter of 2025 to build low-cost inventories, further stimulating demand.
AI-driven demand is also poised to play a crucial role in the market’s recovery. NVIDIA’s planned expansion of Blackwell-series shipments in the latter half of the year is expected to drive enterprise SSD demand significantly.
DeepSeek’s innovations in AI server deployment cost reductions will enable SMEs to integrate AI more effectively, enhancing their competitiveness. Enterprise SSDs with capacities exceeding 30TB are anticipated to become the preferred storage solution, offering superior performance and total cost of ownership advantages.
The growing adoption of AI in personal computing is another factor influencing NAND Flash demand. NVIDIA’s CES announcement of Project Digits, featuring 4TB SSD-equipped systems, is set to accelerate AI integration in PCs and workstations, fueling the need for higher-capacity PC SSDs. As AI-powered PCs become more mainstream, long-term growth in client SSD storage capacities is expected.
DeepSeek’s advancements in lowering computational power requirements are likely to accelerate AI adoption in smartphones, further driving storage demand. The increasing penetration of QLC storage technology in mobile devices, combined with growing AI-driven functionalities, suggests that NAND Flash demand will continue to strengthen as the market transitions toward higher-capacity solutions across multiple sectors.
