SanDisk announced a price increase of over 10% for all NAND flash products starting April 1, 2025, citing a shift to a supply-constrained market and rising costs due to recent tariffs. The move reflects broader industry trends, with AI-driven demand and production adjustments tightening NAND supply, setting the stage for market recovery.
SanDisk¡¯s Price Hike and Market Outlook
SanDisk¡¯s price adjustment, affecting channel and consumer products, responds to an anticipated supply shortage in the NAND flash market. The company highlighted increased operational costs from U.S. tariffs and limited capacity to handle unplanned demand, urging customers to communicate order changes early to avoid extended lead times. SanDisk plans frequent pricing reviews, with additional increases expected in subsequent quarters. At a recent investor briefing, the company noted that while short-term market challenges persist, supply growth is slowing, projecting a supply-demand imbalance favoring demand by late 2025.
Technological Advancements Driving Competitiveness
SanDisk, in collaboration with Kioxia, unveiled a 332-layer 3D NAND chip at ISSCC 2025, achieving a 59% increase in bit density through optimized planar layouts. This chip offers a 33% faster interface speed (4.8 Gb/s) compared to its eighth-generation product. Additionally, SanDisk introduced its High-Bandwidth Flash (HBF), a novel memory architecture blending 3D NAND and HBM characteristics, tailored for AI inference workloads. These innovations position SanDisk to meet the growing storage demands of AI and high-performance applications.
Strategic Shift in Capital Expenditure
SanDisk is optimizing capital investments by adopting longer-lasting node designs, reducing the need for frequent node transitions. The company believes the 3D NAND layer race has concluded, with capital expenditure peaking in 2021. This strategic focus on efficiency aims to lower costs while maintaining competitiveness in the evolving NAND market.
Industry-Wide NAND Market Trends
TrendForce projects a significant improvement in NAND flash supply-demand dynamics by the second half of 2025, driven by manufacturer production cuts, smartphone inventory normalization, and increased demand from AI applications, including DeepSeek-driven edge devices. The firm anticipates price recovery as oversupply eases. For DRAM, consumer-grade prices are expected to dip 3¨C5% in Q1 2025 due to inventory adjustments, while enterprise products remain stable. HBM demand will drive DRAM price increases of 5¨C8% in Q2, with consumer electronics and LPDDR6 procurement pushing rises to 10¨C12% in Q3. By Q4, prices are expected to stabilize, with annual DRAM price growth of 15¨C18%.
Conclusion
SanDisk¡¯s price hike of over 10% starting April 2025 signals a tightening NAND flash market, fueled by AI-driven demand and supply constraints. Innovations like 332-layer 3D NAND and HBF underscore SanDisk¡¯s focus on high-performance storage for AI applications. As the industry moves toward supply-demand balance, strategic production adjustments and technological advancements will drive NAND and DRAM market recovery, with significant price stabilization expected by late 2025.
