NAND Flash Makers Cut Production in 2025
According to the latest research report from TrendForce, the NAND Flash industry is expected to face continued challenges in 2025 due to weak demand and oversupply. In response to this situation, major manufacturers including Micron, Kioxia, SanDisk, Samsung, and SK hynix (along with Solidigm) have initiated production reduction strategies. These measures could potentially accelerate industry consolidation in the long term.
TrendForce highlights that NAND Flash manufacturers are primarily adopting measures such as lowering operating rates and delaying process upgrades to achieve production cuts. Three key factors drive these decisions. First, demand has been shrinking, with shipments of core consumer electronics like smartphones and laptops remaining weak, compounded by a slowdown in enterprise IT investment, which has impacted the growth of enterprise SSD demand. Second, pricing pressure is significant; NAND Flash prices have been declining since the third quarter of 2024, and manufacturers are pessimistic about demand in the first half of 2025, further squeezing profit margins and necessitating production cuts. Lastly, Chinese suppliers are benefiting from domestic substitution policies and continuing aggressive expansions, intensifying global market competition.
Among the key players, Micron has already announced its production reduction plans, and Kioxia and its partner SanDisk have also developed similar strategies. Since both companies primarily focus on NAND Flash products and lack the revenue balance provided by DRAM businesses, their revenue is expected to face greater impact compared to their competitors.
While Samsung maintains a leading position in enterprise SSDs and other sectors, increased competition in the Chinese market and a transitional period in technology upgrades have resulted in mounting inventory pressures, prompting the company to plan production adjustments this year. SK hynix, including Solidigm, despite strong performance in enterprise SSDs in 2024, has also been affected by the overall sluggish demand and has had to revise its production strategy accordingly.
TrendForce notes that in the short term, production cuts may help stabilize prices and alleviate oversupply pressures. However, if prices rise as a result, it could lead to higher costs for downstream manufacturers, ultimately affecting consumer demand. In the long term, these measures could accelerate industry consolidation, with less competitive manufacturers at risk of exiting the market. To remain competitive, companies are encouraged to prioritize innovation and product differentiation, focusing on niche markets to enhance their market positioning.
