Citi Analysts Forecast Positive Outlook for Global Memory Market in 2025
In a recent research note, Citi analysts have projected a promising future for the global memory market in 2025, despite concerns about potential oversupply. The investment bank anticipates that memory average selling prices (ASP) will remain stable, supported by trends in semi-customization and strong demand for AI memory.
According to Citi, NAND is expected to see a robust recovery, with ASP projected to increase by 30% year over year in 2025. On the other hand, DRAM ASP is forecasted to rise at a more modest rate of 14% year over year. The supply and demand dynamics are expected to lead to a more balanced market.
In the DRAM sector, Citi predicts supply growth of 16.6% versus demand growth of 17.0%, with a focus on High Bandwidth Memory (HBM). The launch of HBM4 in the second half of 2025 and a shift in capex towards HBM production are expected to stabilize the market and reduce volatility.
While a HBM undersupply is expected in 2024, Citi forecasts an improvement in the supply-demand ratio to -1% in 2025. NAND supply is projected to grow by 12.2% in 2025, with demand expected to increase by 17.1%, driven by growth in enterprise solid-state drive (eSSD) demand.
Citi suggests that this dynamic could result in NAND supply tightness, with a supply-demand ratio of -4.2%. Memory makers are expected to prioritize DRAM capex, with a 45% year-over-year increase projected for 2025, compared to an 18% increase in NAND capex.
Citi has reiterated its Buy ratings on SK Hynix and Western Digital, expecting these leading memory makers to benefit from the favorable market conditions in 2025.
Analysis:
In summary, Citi's forecast for the global memory market in 2025 is optimistic, with expectations of stable ASP, balanced supply and demand dynamics, and potential growth opportunities in NAND and DRAM sectors. This information can be valuable for investors looking to capitalize on the predicted market trends and make informed decisions regarding their investments in memory-related companies such as SK Hynix and Western Digital.