China’s Volume Decline Amid Strong AI Driven Price Surge Signals a New Supply–Demand Imbalance

China’s storage market entered a structural transition in Q4 2025, as AI‑driven supply pressures pushed DRAM and NAND prices sharply upward despite weakening device shipments. According to Futuresource quarterly reports, DRAM volumes fell 3% QoQ, SSD shipments declined 4%, and internal HDD volumes dropped 12%, while external HDDs remained broadly flat quarter‑on‑quarter.

At the same time, DRAM and NAND contract prices continued their upward momentum from Q3, rising a further 15–20% in Q4 as cloud and AI server operators accelerated procurement. AI‑server demand increasingly diverted production capacity away from consumer products, resulting in halted quotations and even daily‑pricing mechanisms across the local market.

This growing divergence—falling unit volumes alongside rapid component price escalation—highlights the intensifying impact of AI and data‑centre build‑outs. Collectively, these forces are pushing China’s storage ecosystem away from traditional cyclical patterns and into a new AI‑driven supply–demand imbalance.

Sharpened Brand Divergence in China Amid AI‑Driven Supply–Demand Imbalance

China’s INT SSD brand landscape experienced notable competitive shifts in Q4 2025 as an uneven supply–demand environment continued to reshape market positioning. With AI and data‑centre demand absorbing a growing share of upstream memory production, OEM‑backed brands capitalised on structural advantages to secure stronger footing amid tightening component availability.

Futuresource’s Q4 quarterly tracker indicates that the SSD category remained highly concentrated around the top three brands, with Kingston, SanDisk and Samsung accounting for over 50% of the channel market in China.  Local brands account for around one third of the INT SSD market, with Zhitai taking the lead and leveraging the upstream advantages of its parent company, YMTC, being one of the few brands increasing both sales and market share during Q4.

These shifts highlight how leading global brands continue to gain from strong upstream integration, while most domestic players were losing out under the challenging conditions during Q4 2025.  Indeed, the Q4 divergence points to a market increasingly shaped by supply‑chain resilience, upstream access, and product‑portfolio differentiation—factors that will define competitive positioning as China moves through an AI‑driven supply–demand imbalance in 2026.

Domestic DRAM manufacturers strengthen influence in Mid-to Low-End Market

Cost pressures are steering the market toward lower‑capacity, lower‑cost SKUs, with some brands even reintroducing or promoting DDR3 configurations. Consequently, the influence of upstream conditions on overall market integration remains ongoing and highly fluid.

At the same time, domestic manufacturers have been similarly affected by the global pricing upturn. Broad‑based DRAM price increases and capacity prioritization toward higher‑margin HBM and DDR5 have compelled them to align with international pricing trends. While domestic DRAM production has provided partial relief for local demand, it has been insufficient to offset structural shortages driven by intensified AI‑server procurement and wafer‑capacity competition.

Outlook

Q4 2025 sets the stage for China’s storage market entering a new phase of AI‑driven supply–demand imbalance. Persistent price pressure, tightening DRAM and NAND availability, coupled with a continued shift toward lower‑capacity, cost‑efficient SKUs position the industry for another year of elevated pricing and selective growth opportunities driven by AI workloads and domestic ecosystem strengthening.

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Futuresource Consulting provides the insights that power the world’s leading technology and media companies. For more than 30 years, the firm has combined rigorous data, sector expertise and a forward-looking view of market change. Its syndicated research, consulting services and industry partnerships span audio, collaboration, consumer electronics, displays, education, entertainment, media technologies, storage media, semiconductors and AI. https://www.futuresource-consulting.com 

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