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In a nutshell: The AI tech boom is much more than fancy processors from Nvidia and the like. The humble memory and storage components that feed all that powerful silicon are gearing up for a major payday too. According to the latest projections, the DRAM and NAND flash industries are set to see some major revenue increases that'll have these companies rolling in cash reserves.
These projections come courtesy of a TrendForce report. On the DRAM side of things, analysts are forecasting a staggering 75% year-over-year revenue jump in 2024 to hit $90.7 billion. The following year is projected to see an additional 51% increase, pushing DRAM revenue to an eye-watering $136.5 billion.
A key driver here is the rise of high-bandwidth memory. HBM may only make up 5% of total DRAM shipments this year, but it'll account for a hefty 20% of revenue.
Fueling all this is the generational evolution of DRAM products like DDR5 for servers and LPDDR5/5X for mobile devices. DDR5 is expected to comprise 40% of server DRAM shipments in 2024, rising to 60-65% in 2025. For mobile, LPDDR5/5X will likely contribute 50% and 60% of shipments in 2024 and 2025, respectively.
These higher-end DRAM chips command premium pricing. Restrained capital expenditures by DRAM manufacturers, limiting supply, is another factor propping up revenues, according to the report.
Of course, DRAM isn't the only one cashing in. NAND flash storage is also set for a revenue bonanza, projected to soar 77% in 2024 to $67.4 billion. The following year will see another 29% spike, taking it up to $87 billion. A key catalyst is the increasing adoption of high-capacity QLC NAND enterprise SSDs in AI data center servers, particularly for inference workloads. Major cloud providers have already started deploying these high-density QLC drives extensively.
There are even whispers that Apple may start using QLC NAND in future iPhones from 2026 onwards as the tech trickles into mobile devices. QLC NAND is projected to account for 20% of total NAND shipments in 2024, with that share rising further in 2025.
Unfortunately, this tsunami of memory money is a double-edged sword. The report says that while it gives manufacturers ample cash to invest back into R&D and new fabs, it also puts the squeeze on component costs for device makers further down the chain. Those higher DRAM and NAND prices will inevitably get passed on to some degree, potentially putting pressure on retail pricing for smartphones, PCs, and servers.