The DRAM market will see a notable price decline in the first quarter of 2025, with the PC, server, and GPU VRAM segments expected to see significant declines. Seasonal demand fluctuations coupled with strategic inventory management by buyers are driving the downward trend, according to the latest forecast from TrendForce.

In the PC DRAM market, prices are expected to fall by 8-13%. This decline is primarily due to weak consumer demand and an oversupply of DDR4 memory modules. Chinese manufacturers have increased DDR4 production, further saturating the market and putting additional pressure on prices. While DDR5 adoption is steadily increasing, it has not yet reached the scale needed to offset the oversupply of previous-generation DDR4 modules. As a result, PC manufacturers are taking advantage of lower prices to increase inventory, although they are being very cautious to avoid excess inventory amid demand uncertainty.

Server DRAM prices are also expected to decline, but less than PC DRAM, with a forecast decline of 5-10%. The ongoing transition from DDR4 to DDR5 and high-bandwidth memory (HBM) continues to impact the server DRAM market. Major suppliers are reallocating production capacity from DDR4 to newer technologies to meet growing demand from data centers and AI applications. However, an oversupply of DDR4 memory, coupled with cautious purchasing strategies by enterprise customers, has kept prices depressed. While DDR5 adoption is growing, its current usage is still not enough to offset the oversupply of DDR4.

In the GPU VRAM space, prices are expected to decline by 5-10%, primarily due to low demand and elevated inventory levels. Although some capacity has been shifted to HBM, especially for high-performance GPUs for AI and data center applications, demand for traditional graphics DRAM remains weak. The gaming and professional graphics markets have not fully recovered from a period of high inventory levels and weak consumer demand, resulting in a continued decline in GPU VRAM prices.

The continued decline in DRAM prices is consistent with the broader trend observed over the past two years. Previous reports suggest that prices will fall sharply in early 2023, with DRAM costs falling 20% in the first quarter alone. These declines are driven by a combination of oversupply and subdued consumer demand, resulting in continued price declines throughout the year.

Throughout 2024, while the rate of decline has slowed, the market remains challenging. Manufacturer inventory levels are high, and demand remains weak in key sectors such as consumer electronics, gaming, and data centers. In addition, the slow adoption of newer memory technologies such as DDR5 and HBM has led to a chronic oversupply of older generation DRAM modules, further contributing to price instability.

As we head into 2025, there are no immediate signs of these challenges being resolved. Cautious buyer procurement strategies and a persistent supply-demand imbalance are expected to keep prices in the DRAM market subdued. This situation allows buyers to obtain lower-cost components, but suppliers remain under pressure in an increasingly competitive environment.

Storage Supply Forecast to 2025

Inventory in 2025 Here are the key trends we believe will impact the DRAM and NAND markets in the first half of 2025, as well as geopolitical forces that will play a key role in the second half of the year:

Both the DRAM and NAND markets remain in a state of oversupply, with excess inventory leading to significant price declines in the fourth quarter of 2024 and the first quarter of 2025. This is caused by a variety of factors, including weak consumer demand.

Memory manufacturers increased production during previous periods of high demand, but the market failed to meet expectations. This led to an inventory backlog that is currently weighing on prices.

As a result, prices are expected to continue to decline in the short term. However, high-bandwidth memory and enterprise storage solutions, especially for cloud computing and artificial intelligence applications, will remain a relatively stable market segment.

Major NAND Flash companies such as Kioxia and Samsung are reportedly planning to reduce production starting in December 2024 in light of the current oversupply issues. This could have a significant impact on the supply-demand balance and potentially reverse the downward price trend in the second half of 2025.

In the DRAM space, two major memory manufacturers, Samsung and SK Hynix, will cease DDR3 production by the end of 2024 to free up capacity for high-margin products such as high-bandwidth memory. While there are other memory manufacturers still supplying DDR3, it is important to plan the transition to new suppliers and identify other sources.

AI and Big Data: AI-driven infrastructure and big data workloads are driving strong demand for high-capacity NAND solutions, especially those designed for AI servers, ASICs, and enterprise SSDs. The shift toward AI-driven applications such as machine learning, natural language processing, and deep learning models requires large amounts of storage capacity and performance. As AI adoption accelerates across industries, this trend will continue to drive demand for NAND flash solutions optimized for high performance.

Given this boom, hopes are high that AI-driven PCs will spur demand. However, as excess DRAM chip inventory hampers the expected recovery, PC OEMs are reducing DDR4 and DDR5 orders, leading to a 5%-10% price decline in the fourth quarter of 2024, with further price declines expected in 2025. So while AI will spur growth in NAND, the impact on DRAM has yet to be felt.

The United States continues to impose export controls on key semiconductor technologies, affecting China's access to cutting-edge DRAM and memory production tools, thereby limiting its ability to expand production of high-performance chips. 

In return, China is stepping up efforts to develop its own semiconductor manufacturing capabilities. Companies like CXMT may benefit in the short term, but their ability to produce DRAM on par with global leaders such as Samsung, SK Hynix, and Micron remains uncertain.

Additionally, tariffs on memory products and semiconductor equipment will increase cost pressure on DRAM manufacturers. This will continue to increase market volatility, especially if China’s technological isolation deepens further in 2025.

Looking forward to 2025, the DRAM market will continue to face significant downward price pressure, especially in the mobile DRAM and PC DRAM areas. This pressure is expected to intensify in the second half of 2025, with prices likely to fall further, although the decline will be less than in the first half.

On the other hand, the NAND Flash market is expected to achieve price stability in the second half of the year as production reduction measures have taken effect and supply begins to realign with demand. However, the balance between production cuts, strong corporate demand and the global geopolitical landscape will determine price trends and supply chain stability.

While the memory market faces the challenges of falling prices and oversupply in the fourth quarter of 2024 and the first quarter of 2025, it will also move towards a more stable environment in the second half of 2025.

As global demand for data storage continues to expand, memory suppliers must remain agile, manage production efficiently, and respond to external pressures from tariffs, trade tensions and changing market demands. Hopes remain that artificial intelligence, cloud computing and data centers will be key to market recovery and growth in 2025.

The memory market is always changing and increasingly complex, so it's important to have a reliable partner to help you navigate the market.

Reference link https://www.tomshardware.com/pc-components/dram/dram-prices-expected-to-decline-in-early-2025-impacting-pc-server-and-gpu-vram-markets

View more at EASELINK