Anika Begay
Citi analysts forecast a better-than-expected outlook for the global memory market in 2025, despite concerns about potential oversupply.
In a research note to clients this week, investment bank Citi forecast that average selling prices (ASPs) for memory will remain largely flat, supported by trends in semi-customization and strong demand for AI memory.
Citi forecasts a solid recovery for NAND, with ASP expected to increase 30% year-over-year in 2025. In contrast, DRAM ASP is forecast to increase at a more modest rate of 14% year-over-year.
Supply and demand dynamics are also expected to favor a more balanced market.
In the DRAM sector, Citi expects supply growth of 16.6% versus demand growth of 17.0%, with a significant focus on high-bandwidth memory (HBM).
They explain that the launch of HBM4 in the second half of 2025 and a shift in capital spending towards HBM production will help stabilize the market, reducing volatility.
While HBM is expected to face a shortage in 2024, Citi expects the supply-demand ratio to improve to -1% in 2025.
NAND supply is expected to grow 12.2% through 2025, while demand is expected to increase 17.1%, driven by 32.1% growth in enterprise solid-state drive (eSSD) demand.
Citi says this dynamic will likely lead to a shortage in NAND supply, with a supply-demand ratio of -4.2%.
The bank also notes that memory manufacturers will prioritize capital spending on DRAM, which is expected to increase 45% year-on-year in 2025, compared to an 18% increase in capital spending on NAND.
Citi reiterated its Buy rating on SK Hynix and Western Digital (NASDAQ:), expecting these major memory manufacturers to benefit from favorable market conditions in 2025.
