Recently, the two major memory categories seem to have entered a recovery phase. According to the latest data from research firm TrendForce, the overall revenue of DRAM (Dynamic Random Access Memory) in the second quarter of 2025 reached USD 31.63 billion, representing a quarter-on-quarter increase of 17.1%. Meanwhile, the total shipment volume of NAND (Flash Memory Chips) continued to grow, with the combined revenue of the top five brand manufacturers rising 22% quarter-on-quarter to USD 14.67 billion.
However, it is noteworthy that the production capacity control by leading manufacturers has created a short-term mismatch between supply and demand, fostering a positive atmosphere characterized by significant growth in product shipment volume and prices. On the demand side, the actual situation is that there is a huge gap between the demand for AI and non-AI products. The memory market has not truly entered a new round of recovery cycle; instead, it has fallen into a complex predicament featuring "supply and demand affected by leading enterprises' regulation, intensified imbalance due to technological differentiation, and disrupted cyclical rules".
The current "recovery" trend in the memory market is largely the result of the combined effects of production capacity adjustments and technological route choices by leading enterprises such as Samsung, SK Hynix, and Micron, rather than being driven by comprehensive real demand.
In terms of DRAM, TrendForce data shows that in the second quarter of 2025, the DRAM industry witnessed an increase in contract prices of Conventional DRAM, a significant growth in shipment volume, and an expansion in the shipment scale of HBM (High-Bandwidth Memory). The Average Selling Price (ASP) rebounded as purchasing enthusiasm heated up among buyers including PC OEMs (Original Equipment Manufacturers), smartphones, and CSPs (Cloud Service Providers), accelerating the deinventory process of manufacturers. Nevertheless, this price increase is obviously driven by technological differentiation. Leading original manufacturers have shifted a large amount of production capacity to high-end products such as HBM and DDR5, and announced that DDR4 for PC/Server has entered the End of Life (EOL) stage. This has directly triggered urgent stockpiling of DDR4 by downstream enterprises. It is estimated that the contract price of Consumer DDR4 DRAM will surge by 85% to 90% quarter-on-quarter in the third quarter of 2025. However, the supply gap caused by such temporary adjustments is not a signal of the recovery of the memory market.
The NAND market is also fraught with uncertainties. Although the NAND contract price increased by 5% to 10% quarter-on-quarter in the second quarter, the performance of segmented markets is severely differentiated. Benefiting from the shipment of NVIDIA Blackwell platform, the price of Enterprise SSD rose by 10%, while the growth rate of eMMC/UFS products for smartphones was less than 5%, showing an abnormal trend of "no boom in peak season". This differentiation stems from the profit-oriented strategies of manufacturers.
It is reported that Samsung and SK Hynix plan to slow down the pace of investment in advanced NAND in the second half of 2025. This decision is mainly due to the high uncertainty of market demand and the fact that enterprises' funds are more concentrated in the DRAM and packaging fields, which increases the investment burden on NAND. The investment in converting to the 9th-generation NAND at Samsung's P1 plant in Pyeongtaek, South Korea has been reported to be delayed. It was originally planned to start as early as the second quarter of 2025, but it has not yet been implemented.
Digitimes reported on September 1 that Samsung originally planned to take the lead in introducing the hybrid bonding technology for the 9th-generation NAND at its Xi'an X2 production line, but recently decided to cancel this plan and intends to officially introduce it starting from the 10th-generation NAND with more than 400 layers. However, the mass production investment for the 10th-generation NAND is expected to be no earlier than the middle of 2026. Similarly, SK Hynix has concentrated most of its funds on the most advanced DRAM and HBM fields. Due to its lag behind Samsung in the development progress of the 10th-generation NAND, it is difficult to expect new investments in the short term. SK Hynix stated in the financial report meeting for the second quarter of 2025 that its NAND investment will maintain a prudent pace based on the demand situation of downstream enterprises, with the core goal of improving profitability. Western Digital and Micron have cut their NAND production by 15% and give priority to ensuring the supply of high-margin enterprise-level products.
On the demand side, the huge gap between the demand for AI and non-AI products has increased the uncertainty about the trend of market supply and demand. The construction of AI servers and data centers has indeed driven the growth in demand for high-end technology products such as HBM and enterprise-level SSDs. This is because the training and inference of large AI models have strict requirements on the high bandwidth, low latency, and large capacity of memory.
Taking HBM as an example, the demand continued to surge in 2025. The "three memory giants" all announced plans to boost HBM production. SK Hynix predicts that the growth in AI server shipments will drive the continuous rise in HBM demand. Experts predict that the shipment volume of HBM will increase by 65% year-on-year in 2025, which will simultaneously drive the demand for DDR5-related products. In contrast, the demand for non-AI products, especially in the consumer electronics market, for mid-to-low-end memory has remained sluggish. According to IDC data, the global smartphone shipment volume is expected to increase by only 1% year-on-year in 2025, with the growth rate further slowing down compared with 1.5% in the first quarter. The shipment volume of laptops also shows a downward trend.
Mark Murphy, Chief Financial Officer of Micron, pointed out in the earnings call for the second fiscal quarter of 2025 that apart from AI product lines such as HBM and DDR5, low-priced consumer-grade DRAM still accounts for a considerable proportion in the product structure. In addition, the sluggish demand for NAND Flash memory chips and poor production capacity utilization are expected to lead to a further decline in gross profit margin in the third fiscal quarter. The sluggish demand for non-AI products, in sharp contrast to the booming AI products, has become one of the core causes of the distortion of the supply and demand structure. It is worth noting that the current illusion of price increases is leading to misjudgments by small and medium-sized manufacturers.
Memory chip design companies such as Phison Electronics and Silicon Motion increased their stockpiling of consumer-grade NAND controllers in the second quarter, but suffered from inventory backlogs due to insufficient demand from downstream terminals. The inventory turnover days of Phison Electronics increased from 45 days to 62 days in the second quarter, and it had to lower its revenue forecast for the third quarter. TrendForce predicts that the price of memory chips will enter a downward cycle in the first quarter of 2026. Among them, due to the fact that consumer demand for NAND fails to meet expectations, the price may drop by 10% to 15% month-on-month, which indicates that the current price increases lack sustainable demand support.
At present, the traditional cyclical characteristics of the memory market have become increasingly disordered under the superposition of various factors.
Over the past 30 years, the memory chip market has followed a cyclical rule of "overcapacity - price decline - manufacturers' production reduction - supply-demand balance - price rebound - capacity expansion - overcapacity again", with a complete cycle usually lasting 3 to 4 years. However, since 2023, this rule has been completely broken. The memory market, which should have entered a downward cycle in 2024, saw an unexpected price rebound in 2025 due to the outbreak of AI demand and production capacity control by leading manufacturers. Meanwhile, the sluggishness of the traditional consumer-grade market has made the "universality" of cyclical recovery disappear.
From the perspective of supply and demand, the "driving logic" of the cycle has shifted from "demand-led" to "supply regulation-led". In 2025, the global DRAM bit demand increased by 13% year-on-year, but the production capacity increased by 16%, and the production capacity was concentrated on high-end products such as HBM and DDR5, while the production capacity of mid-to-low-end products shrank by 15%. This state of "coexistence of structural overcapacity and shortage" makes the pace of narrowing the supply-demand gap full of uncertainties, laying hidden dangers for price correction in 2026, and it is no longer possible to predict the correction range using traditional cycle theories.
More seriously, the "magnitude fluctuation" of the cycle has become extremely violent, and the market stability has dropped significantly. In the traditional cycle, the maximum increase in DRAM prices usually does not exceed 50%, and the maximum decrease does not exceed 40%, with price fluctuations showing a "gradual" characteristic. However, in this cycle, the magnitude and speed of price fluctuations have far exceeded historical levels. Taking DDR5-4800 memory chips as an example, the price was at the bottom of USD 1.2 per chip in the fourth quarter of 2024, but soared to USD 2.1 per chip in the second quarter of 2025, an increase of 75% in just 6 months, far exceeding the upper limit of the increase in the traditional cycle. The price fluctuation of HBM is even more extreme. The price of HBM2e was USD 25 per GB in the third quarter of 2024, and rose to USD 45 per GB in the second quarter of 2025, an increase of 80%. This "roller-coaster" price fluctuation not only puts downstream module manufacturers and terminal equipment manufacturers under cost pressure, but also intensifies the operational risks of the entire industrial chain.
Experts say that the memory market is in a critical stage of cycle logic reconstruction. In the short term, the price may remain at a high level until the end of 2025 due to the regulation and stockpiling behavior of original manufacturers. In the medium term, the first quarter of 2026 is likely to be the end point of this upward cycle. The weak demand for consumer electronics and the release of mid-to-low-end production capacity will drive the market into an adjustment stage.
(Reprinted from https://www.eefocus.com/）