(Yicai) Nov. 21 -- Prices for high-end data storage products, used in artificial intelligence applications, are anticipated to drop next year while prices for medium and low-end memory chips are expected to recover, according to industry insiders.

High-end memory products have surged in cost this year due to increased demand driven by AI advancements, Ni Huangzhong, chairperson at memory chip maker Shichuangyi Electronics, said to Yicai yesterday at an industry forum. Conversely, the demand for lower-end products has weakened as the market struggles to absorb such high costs, the chief of the Shenzhen-based firm added.

Flash memory prices may rebound in the second half of next year, predicted Ao Guofeng, a research manager at Chinese consultancy TrendForce.

Ao explained the rationale. Lower prices of downstream flash memory products could bolster profits for personal computer and smartphone manufacturers, boosting demand. Meanwhile, manufacturers may voluntarily limit production amidst the potential for oversupply next year, creating upward pressure on prices.

Smartphones are projected to feature enhanced cameras over the next two to three years, requiring more advanced flash memory, Ao explained. Additionally, trade restrictions on AI chips for China may lead domestic phone manufacturers to rely more heavily on flash memory to maintain competitive performance levels.

From a long-term perspective, enterprise-grade solid-state drives are expected to dominate the storage market by 2027, Ao predicted. Beyond that, the increasing adoption of automotive intelligence will likely usher in a new phase of growth for the flash memory sector.

Editors: Shi Yi, Emmi Laine