During TRENDFOCUS’ recent travels around Asia, a common theme emerged in discussions about the NAND and SSD market in 2025. The industry is facing both uncertainty and potential for growth. Factors like tariffs, aggressive pricing strategies, and the differing dynamics of client and enterprise sectors are shaping purchasing behavior. While the market is likely to ship more exabytes this year than in 2024, the pace and extent of this growth remain uncertain.
Purchasing behavior in 2025 reflects cautious optimism, with industry participants taking more measured approaches amid an unpredictable market. SSD companies, impacted by production cuts, are adjusting forecasts due to inflationary pressures, geopolitical concerns, and potential economic slowdowns. Despite these challenges, demand is expected to remain stronger than last year.
The full impact of tariffs is still unclear. Companies are adjusting to new tariff realities, and it remains to be seen how these costs will affect pricing, demand, and supply chains. Some businesses may absorb additional costs, potentially raising prices, while others might seek alternative sourcing or look to relocate parts of manufacturing to mitigate financial impacts.
A notable trend has been the aggressive pricing from China-based NAND and client SSD manufacturers. These companies have significantly lowered prices, particularly in the channel market, as part of a strategy to capture market share. While this benefits buyers in the short term, it has disrupted margins in the channel market and raised questions about the sustainability of such pricing in the long term. This aggressive pricing has had less impact on OEMs, particularly in the client and enterprise segments, where pricing dynamics are different.
In the broader OEM market, the pricing outlook for 2025 is mixed. There is general agreement that price declines will continue through CQ2 ‘25, but expectations for price increases are rising in the second half of the year. This shift is largely driven by production cuts communicated by NAND vendors, which are expected to impact supply starting mid-year and into CQ3 ‘25.