2025 global memory market outlook as per Citi

Citi analysts are forecasting 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, the investment bank Citi projected that memory average selling prices (ASP) will remain largely stable, supported by trends in semi-customization and strong demand for AI memory.

Citi anticipates a robust recovery for NAND, with ASP expected to rise by 30% year over year in 2025. In contrast, DRAM ASP is projected to increase at a more modest rate of 14% year over year.

The supply and demand dynamics are also expected to favor a more balanced market.

In the DRAM sector, Citi forecasts 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 capex towards HBM production will help stabilize the market, reducing volatility.

While a HBM undersupply is expected in 2024, Citi predicts that the supply-demand ratio will improve to -1% in 2025.

NAND supply is projected to grow by 12.2% in 2025, while demand is expected to increase by 17.1%, driven by a 32.1% growth in enterprise solid-state drive (eSSD) demand.

Citi states that this dynamic is likely to result in a NAND supply tightness, with a supply-demand ratio of -4.2%.

The bank also notes that memory makers will prioritize DRAM capex, which is expected to rise by 45% year-over-year in 2025, compared to an 18% increase in NAND capex.

Citi reiterated its Buy ratings on SK Hynix and Western Digital (NASDAQ:), expecting these leading memory makers to benefit from the favorable market conditions in 2025.