Alliance Consulting: NAND Flash manufacturers will restart production cuts strategy in 2025 to alleviate supply-demand imbalance and stabilize prices.

According to the latest research report from TrendForce, the NAND Flash industry will continue to face the dual pressures of weak demand and oversupply in 2025. In this context, in addition to Micron (MU.US) announcing production cuts, Kioxia/SanDisk, Samsung, and SK hynix/Solidigm have also initiated relevant plans, which may accelerate supplier consolidation in the long term. TrendForce stated that NAND Flash manufacturers mainly achieve production cuts for 2025 by reducing capacity utilization rates and postponing process upgrades, driven by the following factors: First, weak demand: core consumer electronics products such as smartphones and laptops continue to have poor shipment volumes, and the slowdown in enterprise IT investments also affects the growth of demand for Enterprise SSDs. Second, price pressure: NAND Flash prices have been declining since the third quarter of 2024, and suppliers are not optimistic about demand in the first half of 2025. This may further weaken profit margins, forcing them to initiate production cuts. TrendForce took stock of the production cuts by major NAND Flash suppliers. Besides Micron, Kioxia and its partner SanDisk also have related plans. Since both companies focus on NAND Flash products and lack a balance with their DRAM business, the revenue impact of implementing production cuts will be greater than other competitors. Although Samsung still maintains a leading position in Enterprise SSDs and other fields, intensified competition in the Chinese market and the transitional period of technological transformation have resulted in increased inventory pressure. They also plan to reduce production this year. SK hynix (including Solidigm), despite performing well in the Enterprise SSD sector in 2024, is still suffering from overall weak demand and has to adjust its production strategy. TrendForce points out that short-term production cuts by NAND Flash suppliers may stabilize prices and ease oversupply pressures. However, if this leads to price increases, downstream manufacturers will face higher costs, affecting consumer willingness. In the long term, production cuts may accelerate industry consolidation, and manufacturers with insufficient competitiveness may face the risk of exiting the industry. Manufacturers need to focus on expanding technological innovation and product differentiation to enhance their competitive advantage and explore niche markets.