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TrendForce reports that the NAND Flash industry's revenue fell by 6.2% QoQ in 4Q24 due to continued inventory reductions by consumer electronics OEMs. Despite relatively stable demand for enterprise SSDs, overall market oversupply led to price declines. In 1Q25, the NAND Flash industry's revenue is projected to drop by more than 20% QoQ due to seasonality and suppliers' aggressive production cuts. Suppliers are actively adjusting capacity and product strategies to address market challenges.
TrendForce reports that the DRAM industry's revenue grew by 9.9% QoQ in 4Q24, driven by server DRAM and HBM sales. However, weak demand for PCs, smartphones, and consumer applications led to a decline in overall ASP. In 1Q25, due to seasonality and inventory adjustments, the overall DRAM ASP is projected to decline by 0-5%, potentially marking the largest quarterly price drop for 2025.
TrendForce reports that despite enterprise SSD order growth driven by NVIDIA's H-series in 4Q24, weak demand for consumer products dampened price increases for enterprise storage, resulting in a slight 0.5% QoQ decline in NAND Flash suppliers' overall enterprise SSD revenue. Enterprise SSD revenue is projected to drop by nearly 30% QoQ in 1Q25 due to suppliers' inventory reduction strategies. Suppliers are actively adjusting their product strategies to address market changes.
President Trump, after taking office, initiated a tariff war with China, Canada, and Mexico immediately, fulfilling the commitment he made in November 2024. This report will update the latest developments and impact analysis of this event. Additionally, Trump announced that high tariffs would be imposed on certain products, specifically targeting Taiwanese semiconductor products with a 100% tariff. If this policy is implemented, it could lead to skyrocketing chip prices in the US market and exacerbate the reorganization of the global supply chain, thus resulting in a profound impact on the technology and trade markets.
TrendForce analyzes that DeepSeek reduces AI deployment costs through optimized algorithms, creating new opportunities for SMEs. While the short-term impact on the memory market is limited, in the long term, DeepSeek will drive the popularization of edge AI applications, increasing DRAM capacity in PCs and smartphones, and boosting demand for high-performance NAND Flash like UFS 4.0. Concurrently, DeepSeek may reduce demand for high-end GPUs and HBM, but will increase demand for general-purpose server DRAM and enterprise SSDs.
TrendForce indicates that the updated US export controls announced on January 15th, 2025, will impact CXMT's process technology, wafer input, yield rates, and market deployment. US equipment suppliers have begun withdrawing personnel from CXMT's fabs since mid-February, affecting its 2025-2026 development plans. The new regulations cover all of CXMT's process nodes, impacting not only its G4 and G4B processes but also the already mass-produced G3 process. This will lead to a downward revision of CXMT's bit output and affect its position in the server DRAM and mobile DRAM markets. In the long term, CXMT's development in the LPDDR5X and DDR5 markets will be hindered.
TrendForce forecasts that despite continued oversupply in 1Q25, the NAND Flash market will see significant improvement in supply-demand dynamics in 2H25, leading to a price rebound. This is driven by suppliers' proactive production cuts, growing AI-related demand, and faster inventory depletion. Chinese government subsidies, AI server demand, and AI PC/smartphone demand spurred by DeepSeek will contribute to the NAND Flash market recovery.
DeepSeek’s rapid rise not only highlights the role of algorithm optimization in balancing model performance and hardware efficiency but also signals a shift in AI development toward inference-driven applications. AI agents are expected to become the primary form of such applications, gradually evolving into systematic Agentic AI, enabling greater automation and goal-oriented task execution.
TrendForce forecasts uncertain growth for AI server shipments in 2025, influenced by US export controls, the rise of DeepSeek, and GB rack preparation progress. The base case projects 28% growth; the worse case, 20-25%; and the bullish case, nearly 35%. While DeepSeek may reduce demand for high-end AI training servers, it will drive edge AI inference server development and encourage CSP investment in custom ASICs, benefiting long-term AI market growth. AI inference is expected to gradually approach a 50% market share.
TrendForce indicates that DeepSeek and other Chinese AI companies are challenging the hardware-centric AI development model by focusing on operational efficiency, potentially prompting CSPs to reassess their AI infrastructure investments. While CSP capital expenditures will remain high in 2025, investments in in-house ASICs will increase to reduce costs and reliance on NVIDIA GPUs. US export controls will further accelerate the development of indigenous chips and algorithms in China's AI sector. In the long term, DeepSeek's emergence may lead to a downward revision in AI GPU demand and shift AI development towards efficiency-focused strategies.
