TrendForce: NAND Flash Brand Supplier Revenue Rises by 5.6% in 2Q14

The eased price drops in the NAND Flash market and growing OEM demands at the end of May have provided a much needed boost to the branded suppliers’ Q2 revenues, which increased by an estimated 5.6% QoQ to US$ 7.649 billion, according to Sean Yang, Research Assistant Vice President of DRAMeXchange, the memory and storage research division of TrendForce. For the remainder of the year, NAND Flash vendors are expected to experience further revenue growth as the NAND Flash restocking demand intensifies under the peak sales periods for smartphones and tablets. 

NAND Flash Manufacturer Highlight 

Samsung 

The main source of momentum for Samsung’s growth in the second quarter was PC and data center SSD, while eMMC, eMCP, and memory card demand from China’s smart device market also provided a boost. Samsung’s bit shipment volume increased by over 20% QoQ in the second quarter, while ASP dropped by 10-15%. As NAND flash demand is expected to increase in the third quarter, bit shipment volume is projected to see double-digit growth and Samsung’s aggressive stance on PC and data center SSD will likely result in a market share increase. 

Toshiba 

Affected by strategic clients’ weak restocking momentum, relatively soft product prices and Toshiba’s carefully controlling output, the manufacturer’s NAND flash revenue has a slight growth of 1.2% in its second fiscal quarter of 2014. With strategic clients introducing new smartphones and tablets in the third quarter, Toshiba’s bit shipment volume is expected to see a significant growth. The second phase of Toshiba’s Fab 5 will be completed in the third quarter, with small batch production beginning in the fourth quarter – the new plant will focus on 15nm 3D NAND flash production. Small batch production of 15nm products will begin in the third quarter of this year, with the initial focus on TLC products. 

SanDisk 

With the focus of SanDisk’s operations has gradually moved towards SSD, SSD revenue (both client and enterprise SSD) has climbed to 29%, whilst bit shipment volume also increased largely by 31% QoQ in the second quarter. Volume production of 1ynm eMMC, eMCP, and SSD products successfully began in the second quarter, accounting for 60% of the manufacturer’s output by the end of the quarter. A portion of capacity will be reserved for 19nm products, as the category remains popular with OEM clients, but 15nm products will see significant output in the first quarter of 2015. With only 5% wafer capacity growth, SanDisk’s bit output is projected to grow by 25-35% in 2014. 

SK Hynix 

SK Hynix’s NAND flash capacity returned to normal, pre-Wuxi fab fire levels, and smartphone and tablet demand began climbing around the same time, which resulted the memory maker to experience 54% QoQ bit shipment growth in the second quarter. However, ASP fell by 19% QoQ due to its product mix and market supply and demand. Looking at the third quarter, as the peak shipment season for smartphone and tablet products arrives, OEM restocking demand is expected to help SK Hynix’s bit shipment growth stay above 20% QoQ. 

Micron 

Micron’s bit shipment volume in 2Q14 has fell by 6% QoQ, compare to the last quarter. ASP stayed flat, while average cost also did not change as the initial yield rate for 16nm products remains low. Thus, Micron’s NAND flash revenue decreased by 5.7% QoQ. For the third quarter, as OEM SSD shipments are expected to pick up and eMMC/ eMCP products will continue to be promoted with Chinese smartphone clients, Micron’s bit shipment growth is projected to return to 10-15% QoQ. 

Intel 

Benefitting from big data and cloud computing growth, enterprise SSD has experienced higher demand in the past few quarters than other NAND flash applications. Although Intel remains the market leader in this sector, the high margins on enterprise SSD have attracted several other NAND flash vendors – Samsung, SanDisk, and Micron to challenge Intel. Furthermore, as overall NAND flash output has not increased much this year, with tight supply beginning in the second quarter, Intel’s revenue fell to US$504 million, with a 1.2% decrease. Increases in the production ratio of 16nm SSD products and diversification of NAND flash supply will help lower Intel’s product cost.