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Press Releases
NAND Flash Market Oversupplied in 3Q22, Price Quotes to Drop by 0~5%, Says TrendForce

2022/06/21

Semiconductors

According to TrendForce research, as output from Kioxia and WDC grows month by month, it has become obvious that production capacity is sufficient to meet increased bit demand However, post-pandemic demand for consumer electronics such as laptops will no longer lead to flagging orders Coupled with slow destocking among Chinese smartphone brands due to the pandemic and rising inflation, these factors will lead to oversupply in the 3Q22 NAND Flash market, in turn affecting a price drop of 0~5% in 3Q22 In terms of Client SSD, although a backstop for business notebook orders remains, demand for consumer notebook and Chromebook orders lags behind 2021, especially as PC brands stock more conservatively Their intention to actively reduce inventory is obvious and the volume of orders in peak season may fall behind last year However, as SSD production capacity gradually returns to normal, supply of client SSDs continues to increase In addition, shipments of Kioxia and WDC products been delivered in succession In order to avoid a sharp increase in inventory, the supply side is willing to let prices spike Client SSD pricing is expected to reverse direction and move downwards approximately 3-8% in 3Q22 In terms of Enterprise SSD, purchase orders from hyperscale data centers remain strong and, compared with other products, clients’ enterprise SSD inventory levels are still reasonable, inducing sustained growth in SSD purchases Global enterprise SSD purchase capacity can be expected to grow by 10% QoQ in 3Q22 Due to rapidly weakening demand for other end products, enterprise SSDs are currently the preferred sales category for all suppliers Increased supply will inevitably intensify price competition As a result, enterprise SSD prices are not likely to rise in 3Q22 and remain roughly in line with 2Q22 In terms of eMMC, demand for Chromebooks has continued to decline since 2Q22 Although the demand for Netcom products in 3Q22 is relatively optimistic, it is still no match for the downward trend of eMMC pricing The impact of the prior raw material contamination incident on the broader market has gradually faded In a climate of poor consumer product demand, it is difficult for suppliers to support 2D eMMC product pricing to maintain profitability Due to the current state of oversupply, eMMC prices are predicted to drop by 3-8% in 3Q22 In terms of UFS, the trends of sluggish smartphone shipments and cooling of the consumer market remain unchanged, suppressing the growth trend of bit demand The impact of the Kioxia/WDC raw material contamination incident at the beginning of the year on the total output of 3D NAND has gradually faded With the recovery of production capacity at the aforementioned companies, the supply of UFS products has been stable Prices are starting to come under pressure amid a weak demand outlook and rising supply Judging from the current demand situation, even if suppliers dole out large price reductions, the effect on demand stimulation remains very limited Therefore, the price of UFS is predicted to drop by 3~8% in 3Q22 and the number of bits sold will remain at a low level In terms of NAND Flash wafers, expecting a drop in pricing, the number of wafer purchases in 3Q22 has an opportunity to rebound in comparison to 2Q22 as the curtain falls on peak season and the pandemic in China At the same time, the impact of flagging upstream supply has gradually faded and the supply side has continued to expand wafer supply Module manufacturers have begun to adopt an active price reduction strategy to reduce their inventories In order to narrow the gap between the wafer contract and spot price, companies had begun to simultaneously reduce wafers contract prices in May, while a contraction in contract pricing in June may extend to nearly 10% Therefore, as wafer pricing had already fallen in May, 3Q22 decline can be mitigated to 5~10% For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/ The Webinar, ”COMPUFORUM 2022 Webinar: Diverse Market Opportunities Generated by Applications of Cyber-Physical Systems” will start from June 15, 2022 The TrendForce research team including Mark Liu, Caron Ju, Bryan Ao, and Alex Chen will present speeches regarding memory, servers, and datacenters, respectively 【Info】 When:Wednesday, June, 15 Where:COMPUFORUM 2022 Webinar (Free to access)  

Press Releases
NAND Flash Pricing to Gain 5~10% in 2Q22 on the Heels of Material Contamination at Kioxia and WDC, Says TrendForce

2022/03/30

Semiconductors

According to TrendForce research, demand continues to weaken due to modestly high inventories maintained by buyers and sellers, coupled with the recent impact of the Russian-Ukrainian war and rising inflation on PCs, laptops, and smartphones However, overall NAND Flash supply has been significantly downgraded in the wake of raw material contamination at Kioxia and WDC in early February, becoming the key factor in a 5~10%  NAND Flash price appreciation in 2Q22 In terms of Client SSD, the Russian-Ukrainian war has compelled PC OEMs to adopt a conservative stocking strategy for orders in 2Q22, which may continue affecting orders during peak season in 2H22, and revising 2022 shipment targets downwards This year, SSD output has officially stepped out from the shadow of the semiconductor shortage As Kioxia’s production capacity gradually recovered to supply SSD products in May and production capacity continues to roughly meet customer demand, suppliers have adopted a more aggressive pricing strategy Price growth in 2Q22 is forecast to moderate to 3~8% compared with original expectations In terms of Enterprise SSD, as procurement capacity and orders for servers and hyperscale data centers grow and lead times on Enterprise SSD products balloon due to material contamination at Kioxia and WDC, clients immediately turned to Samsung and Solidigm looking for supply Since the supply of PCIe 40 products is limited, suppliers have adopted a tough price negotiation policy which will drive the price of enterprise SSD up by 5~10% in 2Q22 In terms of eMMC, demand for consumer products such as TVs, Chromebooks, and tablets continue to weaken, limiting demand for low- and medium-capacity eMMC products to a marginal level Although the primary supply of low-capacity 2D NAND output has yet to be affected by raw material contamination, the overall deal-making atmosphere of the market remains transformed by the contamination incident In addition, the plan of suppliers to gradually reduce 2D production capacity has not changed Therefore, suppliers are eager to maintain profits by increasing the price of relatively low capacity eMMC products eMMC contract pricing in 2Q22 is forecast to rise by 3-8% In terms of UFS, the Russian-Ukrainian war, high inflation, and other factors have weakened demand for the most important UFS applications such as smart phones Likewise affected by the contamination of raw materials, the total output of 3D NAND has been significantly reduced For UFS products with larger capacity and higher layer counts, the downgrade in supply far outstrips movement on the demand side UFS pricing in the 2Q22 is forecast to increase approximately 3~8% In terms of NAND Flash wafers, although demand for products such as flash drives and memory cards is weak, these are low priority products in the supply chain Since raw material contamination has seriously affected the supply of NAND Flash wafers 3D NAND Prices are forecast to move upwards by 5%~10% in 2Q22   For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/

Press Releases
Strong Quake in Northeastern Japan, Preliminary Assessment Suggests Semiconductor Production Currently Unaffected, Says TrendForce

2022/03/17

Semiconductors

A powerful magnitude 73 earthquake occurred off the coast of Fukushima, Japan on the evening of March 16th (CST) Most of northeastern Japan is a production center for global upstream semiconductor raw materials According to TrendForce investigations, in the main quake zone, only Kioxia’s K1 Fab (located in Kitakami) will face the possibility of a further downgrade to 1Q22 production Some of the remaining memory or semiconductor companies in the region are conducting machine inspections but the overall impact has been muted In terms of memory, the intensity of the earthquake at Kioxia’s K1 Fab reached magnitude 5 When the earthquake occurred, wafer input was partially damaged At present, K1 Fab has been shut down for inspection The 1Q22 production capacity of the K1 Fab had been downgraded following the recent contamination incident and accounts for approximately 8% of Kioxia's 2022 production capacity Operating under a cloud of possible aftershocks, Kioxia's capacity utilization rate may be slow to recover in the next week, causing further downward revision of K1 Fab’s 1Q22 production The remaining Kioxia factories are unaffected, as is Micron's Hiroshima plant Looking at the market spot price, pricing has moved up since February due to the contamination of Kioxia’s raw materials The Russian-Ukrainian war did not trigger significant upward or downward movements in spot price After last night’s Fukushima earthquake, pricing remains stable TrendForce asserts, overall spot demand remains weak and prices are not prone to drastic changes In terms of raw wafers, SUMCO's Yonezawa Plant in Yamagata and Shin-Etsu's Shirakawa Plant in Fukushima are both within the affected area, experiencing an earthquake intensity of magnitude 5 Due to the extremely high stability required in the crystal growth process, the industry has not yet announced the impact of the quake TrendForce specifies, in addition to shutdown inspections, damage to machines and silicon wafer input is inevitable However, in addition to redistributing production plans, buildings were reinforced after the 2011 Tohoku earthquake and tsunami in Japan, so overall damage may be minor In terms of foundries, there are two 12-inch wafer fabs and two 8-inch wafer fabs in Japan, including UMC Fab12M (12-inch), Tower Uozu (12-inch), Tonami (8-inch), Arai (8 inches), located in Mie, Toyama, and Niigata prefectures, respectively, and separately experiencing quake magnitudes from 1 to 3 At present, these fabs are operating normally and any impact of the quake on the plants are largely insignificant However, IDM manufacturer Renesas’ Naka plant is within the magnitude 5 zone and they have also shut down and reduced production to confirm the impact of the quake For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/

Press Releases
NAND Flash Pricing Set to Spike 5-10% in Q2 Due to Material Contamination at WDC and Kioxia, Says TrendForce

2022/02/10

Semiconductors

WDC recently stated that certain materials were contaminated in late January at NAND Flash production lines in Yokkaichi and Kitakami, Japan which are joint ventures with Kioxia, according to TrendForce’s investigations Before this incident, TrendForce had forecast that the NAND Flash market will see a slight oversupply the entire year and average price from Q1 to Q2 will face downward pressure However, the impact of WDC’s material contamination issue is significant and Samsung’s experience during the previous lockdown of Xi'an due to the pandemic has also retarded the magnitude of the NAND Flash price slump  Therefore, the Q1 price drop will diminish to 5~10% In addition, according to TrendForce, the combined WDC/Kioxia NAND Flash market share in the 3Q21 was as high as 325% The consequences of this latest incident may push the price of NAND Flash in Q2 to spike 5~10% The contaminated products in this incident are concentrated in 3D NAND (BICS) with an initial estimate of 65exabytes (approximately 6,500M GB) affected According to TrendForce, damaged bits account for 13% of the group's output in 1Q22 and approximately 3% of the total output for the year The normal production schedule for the entire line has yet to be confirmed It is worth noting that the damages announced by WDC likely do not account for total losses stemming for this event and the number of damaged Kioxia parts has not been aggregated, so the total number of affected bits may increase further Production primarily focused on Client SSD and eMMC, subsequent spot pricing may climb Currently, WDC and Kioxia are focused on supplying PC client SSD and eMMC products Since WDC is the number two and number one supplier in the client SSD and eMMC markets, respectively, subsequent supply will inevitably be hampered Therefore, even if production demand for PC OEM is revised downward in Q2, client SSD prices may remain resistant to decline In terms of enterprise SSD, Kioxia PCIe 40 has been verified by a number of customers and the company's market share in 2022 was originally forecast to increase However, this incident will impact Kioxia’s ability to ship product and further affect subsequent customer procurement Therefore, in order for buyers to satisfy their own production requirements, a Q2 decline in enterprise SSD product pricing will be largely restrained In addition, as buyers and sellers in the spot market are still clarifying events and incident assessments, they mostly responded by suspending quotations, with no new quotations having been generated However, TrendForce’s assessment indicates that subsequent events will obviously stimulate spot price appreciation Judging from contract pricing, any orders negotiated on a whole quarter basis should be unaffected in the near-term but there may be an immediate price increase in wafer quotations this February and March For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/

Press Releases
NAND Flash ASP Expected to Undergo 10-15% QoQ Decline in 1Q22 as Market Shifts Towards Oversupply, Says TrendForce

2021/12/15

Semiconductors

Demand for NAND Flash products will undergo a noticeable and cyclical downward correction in 1Q22 as major smartphone brands wind down their procurement activities for the peak season and ODMs prepare for the New Year holidays, according to TrendForce’s latest investigations As such, the NAND Flash market will remain in an oversupply situation, with prices continuing to undergo downward corrections accordingly However, PC OEMs have been reinstating certain orders for client SSDs since early November in response to improvements in the supply of upstream semiconductor materials By fulfilling these orders, suppliers are able to keep their inventory level relatively low, meaning they are not under as much pressure as previously expected to reduce inventory by lowering prices Taking these factors into account, TrendForce expects NAND Flash ASP to undergo a 10-15% QoQ decline in 1Q22, during which NAND Flash prices will experience the most noticeable declines compared to the other quarters in 2022 Regarding the price trend of NAND Flash products across the whole 2021, TrendForce further indicates that suppliers have actively transitioned their output to higher-layer technologies, resulting in a bit supply growth that noticeably outpaces demand, though the tight supply of components such as controller ICs and PMICs has constrained the production of NAND Flash end-products Hence, the decline in contract prices of NAND Flash products has not been as severe as previously expected Moving ahead to 2022, however, the supply of relevant components is expected to gradually improve, so the market for various NAND Flash products will also likely shift towards a noticeable oversupply As a result, prices of NAND Flash products will steadily decline before the arrival of the peak season in 3Q22 Client SSD prices will maintain a downward trajectory in 1Q22, by about 5-10% QoQ While PC OEMs aggressively push out shipments in 4Q21, demand also remains strong for commercial notebooks, in turn propelling the overall volume of notebook production for 4Q21 to 3Q21 levels, surpassing prior expectations Moving into 1Q22, however, notebook demand from the consumer segment and education segment is expected to moderate, and client SSD buyers’ procurement activities for the quarter will therefore become more conservative Suppliers, on the other hand, continue to shift the bulk of their client SSD output to 128L and higher layer products as they release the next generation of client SSDs to both capture market share and increase the consumption of these higher-layer products The average storage capacity of client SSDs will expand to 567GB next year, with WD releasing QLC products alongside existing QLC manufacturers Intel and Micron, in turn intensifying suppliers’ pricing competition TrendForce therefore expects contract prices of client SSDs to maintain their existing downward trajectory and undergo a 5-10% QoQ decline in 1Q22 Prices will decrease by about 3-8% QoQ for PCIe enterprise SSDs but hold flat for SATA enterprise SSDs North American hyperscalers saw their inventory levels rising throughout the fourth quarter as their production capacities for servers were negatively affected by component gaps In addition, some of these issues are expected to persist in 1Q22, so server shipment for the 4Q21-1Q22 period will experience continued declines, thus putting downward pressure on the growth of enterprise SSD bit demand As for the supply side, not only has the issue of insufficient PMIC production capacity become gradually alleviated, but hyperscalers have also cut down on their enterprise SSD orders somewhat due to their focus on inventory reduction Hence, the production capacities for enterprise SSDs with PCIe interface have slowly returned to normal, and room for price negotiations with suppliers is also beginning to surface Regarding enterprise SSDs with SATA interface, their supply has become relatively tight because manufacturers prioritize the production of high-density PCIe SSDs over SATA SSDs, which feature an older interface and lower density As such, contract prices of SATA SSDs are unlikely to drop For 1Q22, TrendForce forecasts an overall 3-8% QoQ decline in enterprise SSD prices, with contract prices of SATA enterprise SSDs mostly holding flat and prices of PCIe products declining by 3-8% QoQ eMMC prices will decrease by 5-10% QoQ TVs, Chromebooks, and other categories of consumer products that carry eMMC solutions have been experiencing sluggish demand in the second half of this year as related subsidies and tenders in the US wind down The seasonal fluctuations of the demand for consumer products will return to the pre-pandemic pattern next year Chromebook production is forecasted to show a small rebound in 1Q22 and climb to the year’s peak in 2Q22 in accordance with the traditional seasonal pattern Even so, the annual total Chromebook production for 2022 will still register a significant decline from the previous year Turning to TV production, a QoQ decline is projected for 1Q22 Taking account of these demand-related projections, TrendForce expects the demand for eMMC solutions to be fairly weak in 1Q22 The overall production capacity for low-density 2D NAND Flash products has remained relatively constant Some suppliers continue to scale back 2D NAND Flash production capacity, but they have slowed down the pace of reduction Regarding the price trend of eMMC solutions, it is now adjusting downward to a stable level after the surge in 2Q21 TrendForce forecasts that contract prices of eMMC solutions will drop again by 5-10% QoQ for 1Q22 UFS prices will decrease by 8-13% QoQ due to rising supply and falling demand Component gaps in the upstream sections of the supply chain are still a serious issue affecting smartphone brands’ device production Despite the contribution from the traditional peak shipment season in the second half of the year, the YoY growth rate of the total smartphone production in 2021 is expected to once again fall short of earlier projections Looking ahead to 1Q22, Apple is expected to scale back its smartphone-related demand due to seasonality This, in turn, will negatively affect NAND Flash suppliers’ bit shipments and further weaken mobile storage demand as a whole The latest examination of product shipments from NAND Flash suppliers indicates that 1XX-L technologies are now mainstream, and 1YY-L technologies will gradually be adopted during 1H22 Micron has skipped 128L in its stacking technology migration and thereby advanced from 96L directly to 176L To lower production cost and raise bit output, suppliers continue to increase the layer number of their 3D NAND technologies This means that supply growth will further outstrip demand growth in 1Q22 as the off-season sets in Hence, TrendForce forecasts that prices of UFS solutions will also register steeper QoQ declines of 8-13% for 1Q22 NAND Flash wafer prices will decrease by 10-15% QoQ as oversupply becomes more severe Sales of retail storage products such as UFDs and memory cards have been weak through this entire year The promotional activities initiated by e-commerce companies for the special events and festivals near the end of the year have generated only a marginal amount of demand Looking ahead to the early part of 2022, the demand for retail storage products is not expected to gain noticeable momentum before the arrival of Lunar New Year holiday Additionally, the cryptocurrency market has been energetic, so the demand for graphics cards from cryptocurrency miners has been outpacing supply for the most part This development has been impacting shipments of DIY PCs and thereby suppressing the demand for retail client SSDs during 2021 In sum, the aforementioned factors have significantly impeded the consumption of NAND Flash wafers In view of the demand situation in the different application segments, NAND Flash suppliers will likely ramp up wafer shipments to prevent excess inventory Moving into 1Q22, even if there is sustained demand for storage components in the PC and server segments, smartphone-related demand will shrink further and exacerbate the oversupply situation of the NAND Flash wafer market TrendForce forecasts that contract prices of 3D NAND Flash wafers will fall by 10-15% QoQ Among the various NAND Flash products, 3D NAND Flash wafers will suffer the sharpest price drop It is worth noting that the growing gap between supply and demand is already exerting considerable pressure on some suppliers, so there is a possibility that suppliers could begin dumping products earlier than expected at the end of this year Such development could help moderate the magnitude of the price downtrend in 1Q22 For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/

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