While global attention is focused on the AI computing power race and the arms race for HBM (High Bandwidth Memory), a much larger and more fundamental storage market is quietly undergoing a structural transformation driven by artificial intelligence. It is no longer just a supporting player for expanding smartphone and PC storage but is becoming critical infrastructure supporting massive AI data storage and high-speed inference—this is the NAND flash market.

A recent report from J.P. Morgan, titled "Global NAND Flash Market Deep Dive: Evolution, Innovation, and Future Outlook," systematically analyzes key turning points for the NAND industry over the next three years. It clearly states that, thanks to explosive demand for enterprise SSDs (eSSDs) in AI inference scenarios, the NAND market's growth rate is set for a historic leap. A new cycle, driven by technology, supply-demand dynamics, and capital discipline, has already begun.

Core Insight: Value Reassessment from Consumer Electronics to AI Infrastructure

1. Market Dynamics: Historic Leap in TAM Growth, AI as the Core Engine The report indicates that over the past 25 years, NAND bit demand growth has slowed due to the maturation of the consumer electronics market. However, a fundamental shift is expected in the next three years: the global NAND market's Total Addressable Market (TAM) Compound Annual Growth Rate (CAGR) is projected to jump from a long-term average of 10% to over 30%. The core driver of this leap is artificial intelligence. NAND flash, through enterprise SSDs (eSSDs), plays a crucial role in AI inference, handling key scenarios like KV cache offloading and context storage, perfectly compensating for HBM's limited capacity and high cost. - Data Evidence: eSSD shipments surged 86% year-over-year in 2024, hitting a record high since 2012. By 2028, eSSD's share of bit demand is expected to soar to 53%, reaching a staggering 900 exabytes (EB). - Synergy Effect: Tight supply of traditional HDDs is further accelerating the penetration of high-density QLC SSDs in nearline storage, creating a new pattern of complementary strengths between SSDs and HDDs.

2. Supply, Demand, and Pricing: Strong Capital Discipline Meets Strong Demand, Clear Uptrend Cycle In stark contrast to the demand explosion, the supply side is exhibiting unprecedented "capital expenditure discipline." - Supply Restraint: From 2025-2027, the NAND industry's average capital intensity is only 16%, significantly lower than DRAM's 26%. Major manufacturers are focusing on technology upgrades rather than aggressive capacity expansion, limiting output growth. - Strong Price Rebound: After a deep downturn in 2022-2023, the market rapidly cleared inventory following production cuts by leading suppliers. Since hitting bottom in mid-2025, NAND prices have rebounded sharply. For example, the spot price for 512GB TLC wafers surged from $2.7 to $15 within six months, a 5.5-fold increase. - Future Outlook: The report predicts a 40% increase in the NAND industry's Average Selling Price (ASP) in 2026. Although the overall ASP might see a slight adjustment in 2027, high-value NAND products for enterprise servers still have ample room for price increases.

3. Technological Innovation: Intensifying 3D Stacking Race and Dawn of Next-Gen HBF Technology is the fundamental driver for reducing NAND costs and improving performance. Current competitive focuses include: - Heated Layer Count Race: The industry mainstream has moved beyond 176 layers, with Samsung, SK Hynix, and the Kioxia/Western Digital alliance all advancing towards 300+ layers to meet the AI data center's thirst for high-density storage. - Architectural Revolution: Hybrid bonding technologies, such as Kioxia's CMOS Direct Bonded Array (CBA), are achieving leaps in both performance and density by breaking through traditional architecture limitations. - Future Variable – High Bandwidth Flash (HBF): Proposed by SanDisk, HBF technology is seen as a potential game-changing long-term variable. It aims to stack NAND dies using TSV technology, offering both high capacity and high bandwidth at a lower cost than HBM, potentially becoming a new storage solution for AI inference, with commercialization expected as early as 2028.

4. Competitive Landscape and Investment Trends: Winners in an Oligopolistic Market The NAND market features a highly concentrated oligopolistic structure, with the top three players—Samsung, Kioxia, and SK Hynix—collectively holding approximately 80% market share. - Differentiated Competition: SK Hynix (including Solidigm) leads in QLC eSSDs; Samsung and Kioxia dominate the TLC eSSD market; Micron competes on density advantages with its high-layer-count products. - Server Segment is Key: Manufacturers are全力 focused on increasing their share of the server business. Among them, Kioxia is listed by J.P. Morgan as a top pick (Overweight rating), as its potential to increase server business share is most significant, positioning it to fully benefit from the industry's upcycle.

Core Conclusion of the Report: The Dawn of a New Era The core conclusion of the J.P. Morgan report is clear and forceful: the NAND flash market is at a historic inflection point, transitioning from being driven by consumer electronics to being driven by AI and enterprise storage. Technologically, 3D stacking and architectural innovations continue to push physical limits. In terms of supply and demand, strict capital discipline resonates with exploding AI demand, driving a long-term recovery in prices and profitability. Competitively, leading manufacturers with advantages in technology, capacity, and customer positioning will reap the greatest benefits from the industry's upcycle. The projected CAGR of over 30% for the next three years is not a fleeting phenomenon. It signifies the market's reassessment of NAND's value as a core data storage medium in the AI era. A "Golden Age" for the NAND industry is arriving.