When Can We Expect Price Inflection Points For DDR, And Nand Flash Products Like SSD, USB Flash Drive And Memory Cards?

                 When can we expect price inflection points for DDR, and Nand Flash products like SSD, USB Flash drive and Memory cards?

 

I. Price Increase Logic and Cyclical Concerns

Core Driving Force: Explosive demand for AI servers-each AI server requires 8 times more DRAM and 3 times more NAND than ordinary servers. In Q4 2025, the contract price of DRAM increased by over 175% year-on-year, and the spot price of some models soared by 100%-400% compared with the beginning of the year.

Cyclical Risk Warning: The storage market has a "50% Curse"-over the past 40 years, when the annual growth rate exceeds 50%, the growth rate often slows sharply or even turns negative in the following year. Driven by AI, the growth rate of the global storage chip output value is approaching this threshold in 2025. Meanwhile, manufacturers are flocking to HBM, leading to the accumulation of "weir" risks in mature process capacity.

 

II. Three Core Drivers of Price Decline

1. "Spillover Effect" of Manufacturer Capacity

Samsung and SK Hynix have allocated over 90% of their new capacity to HBM4/DDR5 production lines. 2026 coincides with the retirement wave of equipment from the previous expansion cycle (1y/1z nodes). To recover cash flow, manufacturers will sell mature products such as DDR4 RDIMM and enterprise SSD at a discount. At the same time, the current yield of HBM4 is less than 60%; once the yield exceeds 75% in Q1 2026, the released wafer capacity will further impact the market.

2. Year-end Capital and Inventory Pressure

OEM Factories: November-December is the peak shipment period; at the end of the year, factories will sell inventory intensively to balance financial statements. The interval between the 2026 Gregorian New Year and Lunar New Year is only 38 days (below the 45-day threshold), and coupled with the suspension of procurement during the North American Christmas holiday, the demand side enters a stage of temporary weakness.

Distributors: A hidden inventory 1.8 times the normal level was hoarded in Q3. From late December to January, distributors face the pressure of closing accounts and repaying loans (annual interest rate of short-term loans is 12%-15%), requiring rapid monetization of hidden inventory. Before the Lunar New Year, OEMs also need to reduce prices to recover funds for payments, forming a chain reaction of "price reduction promotion - price stampede".

3. Rational Return of the Demand Side

The storage inventory of the four major North American CSPs (Meta, Google, etc.) has exceeded the normal level by 3 weeks, and a de-inventory cycle is highly likely to start in Q1 2026. New architectures of Google TPU v6 and NVIDIA Rubin are scheduled to be launched in Q2 2026, so CSPs will enter an 8-12 week "technical freeze period" and suspend storage procurement. Meanwhile, the 90-day payment term from OEMs to CSPs means that the payment for Q4 shipments will be due in January 2026, and the Lunar New Year shutdown intensifies capital pressure, further forcing price reductions.

 

III. Nature of the Inflection Point and Industry Recommendations

Nature of the Inflection Point: It is a technical correction rather than a cycle reversal. The price of HBM4 will still increase by 15%-20% month-on-month; the price floor of enterprise DDR5 products is 30% higher than that in Q3 2024. The price reduction window is only 6-8 weeks, and moderate growth will resume after March 2026. The probability of the inflection point being delayed is less than 15%.

Countermeasures: Buyers can seize the "golden procurement window" from mid-January to early February 2026; distributors need to strictly control inventory and optimize cash flow to cope with short-term fluctuations.

 

Enterprise storage products of imported brands such as Samsung, SK Hynix, and Micron are expected to usher in two price decline windows in December 2025 (before the Gregorian New Year) and February 2026 (before the Lunar New Year). This round of price reduction is a technical correction rather than a cycle reversal.