Despite concerns that China's low-cost AI model, DeepSeek, could disrupt the tech industry, SK hynix president and CEO Kwak Noh-jung disagreed. He pointed out that while DeepSeek's low-priced AI model may cause market volatility in the short term, in the long run, it will promote the application and development of AI technology and bring new opportunities to the semiconductor industry.
Kwak singled out that concerns about the rise of AI models such as DeepSeek leading to tech giants reducing their investment in AI servers and the decline in demand for HBM memory are overblown. He doesn't think these fears will come true. On the contrary, as more companies adopt AI technology, the demand for high-performance storage solutions will increase, which will further drive the growth of the semiconductor industry.
The current state and future forecast of the NAND flash memory market
Kwak is more cautious in the NAND flash market, but he also expects the market to start recovering by the end of 2025. Currently, the NAND Flash market is facing a serious oversupply problem. According to the latest research by TrendForce, the price of NAND Flash in the market continued to decline in the first quarter of 2025, putting significant financial pressure on suppliers. However, TrendForce expects the market supply-demand balance to improve significantly in the second half of the year.
Figure: SK hynix CEO is optimistic about the impact of DeepSeek, predicting that the NAND market will recover by the end of 2025
Industry responses
After entering 2025, NAND Flash manufacturers have taken more decisive measures to reduce production, cutting annual production to control the growth of supply. Samsung and SK hynix have begun to reduce NAND flash production due to oversupply, which means that both companies' NAND production in the first quarter of 2025 will be more than 10% lower than in the second half of 2024. These measures are designed to quickly ease market imbalances and lay the groundwork for a price recovery.
Future outlook
Looking ahead, the NAND flash memory market is expected to recover in the second half of 2025. As manufacturers actively adjust their production strategies, the relationship between supply and demand in the market will gradually return to normal. In addition, the following factors will further promote the recovery of the market:
1. Technological innovation: Advancements in new technologies such as 3D NAND and QLC (Quadruple Cell) technology will continue to improve storage density and performance to meet the growing demand for data.
2. Emerging application areas: The rapid development of emerging fields such as 5G, Internet of Things (IoT), autonomous vehicles, and artificial intelligence will significantly increase the demand for high-performance, high-capacity storage devices.
3. Data Center Expansion: The increasing number of data center expansion and upgrade projects across the globe represents a huge opportunity for the NAND Flash market. Especially with the development of cloud computing and edge computing, the demand for high-capacity, high-speed storage solutions will continue to rise.
4. Consumer demand: The replacement of smartphones, tablets, and other consumer electronics will also drive the demand for NAND Flash. Especially in high-end flagship models, there is an increasing demand for higher storage capacity and faster read and write speeds.
In summary, despite the current challenges facing the NAND flash market, through the joint efforts and technological innovation within the industry, the market is expected to gradually recover and achieve solid growth in the coming months. SK hynix CEO Kwak Noh-jung's optimistic forecast also instilled confidence in the industry as a whole.
