TrendForce: NAND Prices Expected to Recover in the Second Half
Production Cuts and Rising AI Demand Drive Outlook
Growing Demand for Smartphones and Enterprise SSDs
The prices of NAND flash, which have entered a downward trend, are expected to normalize in the second half of this year, supported by manufacturers' production cuts and increased demand from artificial intelligence (AI) applications.
On the 17th, market research firm TrendForce stated, "Although the NAND flash market is expected to continue experiencing price declines due to oversupply in the first quarter of this year, the balance between market demand and supply is expected to improve significantly in the second half."
They cited proactive production cuts by manufacturers, inventory reductions in the smartphone sector, and increased demand from AI and deep search applications as the main causes.
Until last month, TrendForce had predicted that the NAND industry would face dual pressures from weak demand and oversupply.
NAND prices were expected to fall by about 10?15% in the first quarter of this year, and the annual NAND demand growth rate was revised downward from 30% to 10?15%.
In response, major companies reportedly began cutting NAND production, which had seen profitability deteriorate due to price declines continuing since the third quarter of 2023.
TrendForce said, "Manufacturers such as US-based Micron, Samsung Electronics, SK Hynix (including Solidigm), Kioxia, and SanDisk have established NAND production cut plans," adding, "Production cuts are mainly being implemented by lowering operating rates and delaying process upgrades."
TrendForce expects that from as early as the second quarter of this year, production cuts by suppliers and AI demand will drive a recovery in NAND prices.
In the fourth quarter of last year, China's subsidy policy effectively promoted smartphone sales, accelerating the depletion of NAND inventory.
Additionally, as the decline in NAND prices slows, smartphone brands are expected to build low-cost inventories in the second quarter, further boosting NAND demand, according to TrendForce's analysis.
NVIDIA's potential increase in shipments of its Blackwell series products in the second half of the year is also seen positively. With expanded shipments, demand for high-value-added NAND products such as enterprise solid-state drives (SSDs) is expected to rise significantly.
In particular, TrendForce forecasts that the emergence of DeepSeek, which reduces AI server construction costs, will lead AI-related small and medium enterprises to prefer storage devices of 30 terabytes (TB) or more, increasing demand for enterprise SSDs.
Furthermore, as AI adoption expands in personal computing and smartphones, demand for high-capacity, high-performance PC SSDs and storage devices for mobile devices is also expected to increase.
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