5 Expectations for the Memory Markets in 2025

TechInsights has a new memory report that is worth a look. It is free if you are a registered member which I am. HBM is of great interest and there is a section on emerging and embedded memories for chip designers. Even though I am more of a logic person, memory is an important part of the semiconductor industry. In fact, logic and memory go together like peas and carrots. If you are looking at the semiconductor industry as a whole and trying to figure out what 2025 looks like you have to include memory, absolutely.

TechInsights also has some interesting videos, I just finished the one on chiplets that was published last month:

TechInsights is a whole platform of reverse engineering, teardown, and market analysis in the semiconductor industry. This collection includes detailed circuit analysis, imagery, semiconductor process flows, device teardowns, illustrations, costing and pricing information, forecasts, market analysis, and expert commentary. 

Inside the memory report are links to many more (not free) reports included for a more detailed view. Here is the first section of the report:

5 Expectations for the Memory Markets in 2025

The memory markets, encompassing DRAM and NAND, are poised for significant growth in 2025, largely driven by the accelerating adoption of artificial intelligence (AI) and related technologies. As we navigate the complexities of these markets, several key trends emerge that are expected to shape the landscape. Here are five expectations for the memory markets in the coming year, along with a potential spoiler that could disrupt everything.

1. AI Leads to Continued Focus on High-Bandwidth Memory (HBM)

The rise of AI, particularly in data-intensive applications like machine learning and deep learning, is driving an unprecedented demand for high-bandwidth memory (HBM). Shipments of HBM are expected to grow by 70% year-over-year as data centers and AI processors increasingly rely on this type of memory to handle massive amounts of data with low latency. This surge in HBM demand is expected to reshape the DRAM market, with manufacturers prioritizing HBM production over traditional DRAM variants.(Learn More)

2. AI Drives Demand for High-Capacity SSDs and QLC Adoption

As AI continues to permeate various industries, the need for high-capacity solid-state drives (SSDs) is on the rise. This is particularly true for AI workloads that require extensive data storage and fast retrieval times. Consequently, the adoption of quad-level cell (QLC) NAND technology, which offers higher density at a lower cost, is expected to increase. QLC SSDs, despite their slower write speeds compared to other NAND types, will gain traction due to their cost-effectiveness and suitability for AI-driven data storage needs. Datacenter NAND bit demand growth is expected to exceed 30% in 2025, after explosive growth of about 70% in 2024.(Learn More)

3. Capex Investment Shifts Heavily Towards DRAM and HBM

Driven by the surge in AI applications, capital expenditure (capex) in the memory market is increasingly being funneled towards DRAM, particularly HBM. DRAM capex is projected to rise nearly 20% year-over-year as manufacturers expand their production capacities to meet the growing demand. However, this shift has left minimal investment for NAND production, creating a potential supply-driven bottleneck in the market. Profitability in the NAND sector continues to improve, which could reignite investment in this area as we move into 2026.(Learn More)

4. Edge AI Begins to Emerge but Won’t Impact Until 2026

Edge AI, which brings AI processing closer to the data source on devices like smartphones and PCs, is anticipated to hit the market in 2025. However, the full impact of this technology won’t be felt until 2026. Devices with true, on-device AI capabilities are expected to launch in late 2025, but sales volumes are unlikely to be significant enough to influence the memory markets immediately. The real shift should occur in 2026 as edge AI becomes more widespread, driving demand for memory solutions tailored to these new capabilities. (Learn More)

5. Datacenter AI Focus Delays Traditional Server Refresh Cycles

The focus on AI-driven data centers has led to a delay in the refresh cycle for traditional server infrastructure. Many organizations are diverting resources to upgrade their AI capabilities, leaving conventional servers in need of updates. While this delay might be manageable in the short term, at some point, these servers will need to be refreshed, potentially creating a sudden surge in demand for DRAM and NAND. This delayed refresh cycle could result in a significant uptick in memory demand once it finally happens. (Learn More)

Spoiler: A Sudden Halt in AI Development Could Upset Everything

While AI is the primary driver behind these market expectations, it’s important to consider the potential for a sudden slowdown in AI development. Whether due to macroeconomic headwinds, diminishing returns on AI investments, or technical roadblocks in scaling AI models, a significant deceleration in AI progress would have profound negative implications for the memory markets. Such a halt would likely lead to a sharp decline in demand for HBM, DRAM, and high-capacity SSDs, disrupting the expected growth and investment patterns in these sectors. As such, while the memory markets are poised for substantial growth in 2025, they remain highly susceptible to the broader trajectory of AI advancements.

Also Read:

Semiconductor Industry Update: Fair Winds and Following Seas!

Samsung Adds to Bad Semiconductor News

Hot Chips 2024: AI Hype Booms, But Can Nvidia’s Challengers Succeed?

The Semiconductor Business will find a way!