After nearly two years of price declines, the global NAND flash market is finally showing signs of recovery. According to the latest report from industry research firm TrendForce, NAND Flash contract prices are expected to rise by 5% to 10% in the fourth quarter of 2025, with some premium categories possibly exceeding this range. The news has drawn wide attention, as many in the industry believe the storage sector is entering a new cycle driven by a fundamental shift in supply and demand.
Supply: Production Cuts Begin to Take Effect
Over the past two years, NAND manufacturers have gone through a painful inventory correction phase. Since 2023, major global producers—including Samsung, Micron, Kioxia, Western Digital, and SK hynix—have implemented production cuts to stabilize prices. According to TrendForce, total NAND output has declined by roughly 15–20% from its peak levels since the second half of 2024, with some companies delaying new fab expansions by six to twelve months.
The immediate effect of these production cuts has been a steady reduction in excess inventory. By the end of the third quarter of 2025, the average inventory level across major NAND suppliers had fallen to a healthy range of 8–10 weeks, compared to over 20 weeks at the peak of oversupply in 2023. This shift gives manufacturers room to adjust pricing strategies.
At the same time, several companies are optimizing their product mix to improve profitability. Samsung has shifted more production capacity toward enterprise-grade PCIe Gen5 SSDs and high-layer 3D NAND, while Micron has focused resources on ramping up its 238-layer and 300-layer NAND production. These technological advancements not only increase bit density per wafer but also provide the foundation for higher pricing going forward.
Demand: AI and High-Capacity Applications Drive Growth
While supply tightens, demand is rebounding strongly. The TrendForce report highlights AI servers and high-performance computing (HPC) as the main drivers of NAND consumption. AI model training and inference workloads require fast and high-capacity storage, leading to a surge in enterprise SSD (eSSD) demand.
The consumer electronics market is also showing signs of recovery. After hitting a bottom in 2023, global PC shipments have been rising steadily in 2025. Smartphone brands are also increasing storage capacities in flagship devices. For instance, Samsung’s Galaxy S25 Ultra and Apple’s iPhone 17 Pro now feature a higher ratio of 1TB configurations, fueling demand for high-density NAND chips.
In the consumer SSD market, capacity upgrades have become the norm. Typical mainstream SSDs have moved from 512GB to 1TB–2TB, with limited price reductions, allowing manufacturers to restore profit margins. TrendForce forecasts that global NAND bit shipments will grow 8–10% year-over-year in 2025, while the average selling price (ASP) is expected to rise 5–10% quarter-over-quarter in Q4 — the first notable quarterly increase since 2022.
Prices Stabilize, Profits Recover, Confidence Returns
For the past two years, the NAND industry has suffered through an extended downturn. Since mid-2022, contract prices have fallen by more than 70%, pushing many suppliers into losses. NAND business units at Samsung Electronics, Micron, and Kioxia all reported operating losses in early 2023, with overall gross margins dropping to single digits or even negative levels.
Now, with production cuts taking effect and inventories normalized, the market landscape has shifted. Prices have been rising for three consecutive quarters since Q2 2025, driving clear improvements in financial performance. Both Samsung and Micron reported that their NAND divisions returned to profitability, while Western Digital announced plans to spin off its NAND business for an independent listing in 2026.
TrendForce analysts emphasize that this price recovery reflects structural correction rather than short-term speculation. Unlike previous rebounds driven by market panic or short-lived trading, this recovery is built on a solid supply-demand foundation. As suppliers maintain disciplined capacity control and focus on gradual technology upgrades, the NAND market’s profitability is expected to improve steadily.
High-Layer 3D NAND Becomes the New Focus
On the technology front, NAND manufacturers are accelerating their transition to higher-layer stacking. Micron has already mass-produced 238-layer NAND and plans to move into 300-layer production in 2026. Samsung and SK hynix are developing products that exceed 280 layers.
Higher stacking brings greater storage density, lower cost per bit, and better power efficiency — all critical to maintaining competitiveness. Meanwhile, technologies such as QLC (quad-level cell) and PLC (penta-level cell) are advancing toward commercialization.
As AI and data center applications demand higher throughput and lower latency, next-generation NAND will need to balance speed, endurance, and reliability more carefully. Manufacturers are becoming more cautious in R&D investments, favoring incremental layering improvements over aggressive process changes to maintain cost efficiency and stability.
Future Outlook: Full Recovery Expected by 2026
Looking ahead, TrendForce believes that the NAND market is entering a sustainable growth phase that will continue into 2026. The recovery will be driven by several key factors:
Persistent demand from AI servers and enterprise storage;
Expansion of automotive and edge computing applications;
Rebound in consumer electronics, boosting NAND content per device;
Lower costs from new process nodes, improving profitability.
However, analysts also warn that the current rebound is still in its early stages. If manufacturers expand production too aggressively after profits recover, the market could once again fall into oversupply, leading to price corrections. Maintaining a balance between capacity discipline and technology advancement will be crucial for sustaining the upcycle.
Overall, the NAND industry is emerging from a prolonged period of imbalance and moving toward a healthier structural recovery. The ongoing rise in prices not only signals profit recovery for suppliers but also reflects renewed confidence across the semiconductor memory sector.
A Rising Market Marks the Start of a New Cycle
In summary, the predicted fourth-quarter increase in NAND contract prices marks a critical turning point — a shift from the “winter” of oversupply to the “spring” of recovery. The rebound will help restore profitability, revive capital investment, and accelerate technological innovation throughout the storage industry.
Industry experts broadly agree that late 2025 to early 2026 will be a key window for the NAND sector’s renewed growth. Both enterprise storage and consumer SSD markets are expected to benefit from this new phase, driven by technological upgrades and expanding demand. For the global memory industry, the coming year could mark the beginning of a longer and healthier growth cycle.
