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2023/06/06
TrendForce research reveals that following significant production reductions by US and Korean manufacturers beginning in May, some suppliers have increased their wafer prices This development has led to a slight elevation of market prices in China compared to those seen in March and April
In light of these changes, TrendForce predicts a market shift in June The price of mainstream 512 Gb NAND Flash wafers may cease its precipitous descent and start a mild recovery as module makers intensify their stock-building activities This would reverse a trend of sharp decreases that have marked the sector since May 2022
TrendForce has further projected a rise in prices starting in 3Q23, with an expected increase of around 0-5% The rate of price growth is anticipated to expand further to 8–13% in 4Q23 However, for products such as SSDs, eMMC, and UFS, inventories still need promotional efforts to be cleared, and there are currently no indications of price increases
The second half of the year will see the arrival of the peak season for stock preparation Despite subdued demand leading to continued downgrades in end-product shipments this year, the market still expects higher shipments in the second half compared to the first half, with the potential for sequential increases in purchase volumes
TrendForce cautions, however, that high inventories among downstream module makers in the second quarter will determine whether strategic stock preparation takes place, and this will depend on two crucial factors: how well demand recovers during the peak season and whether suppliers will remain firm in pricing and persist against continued downward pressure
TrendForce notes that Chinese module makers are particularly keen on maintaining low-cost inventory, showing a higher tolerance for modest wafer price increases This may cause prices for some capacity wafers in the Chinese market to stabilize and begin a rebound ahead of other markets If other markets follow suit and accept moderate price hikes, it could validate and bolster the trend of suppliers raising wafer prices, thereby inducing a proactive purchasing strategy among buyers This strategic shift is poised to further support a subsequent surge in wafer prices
TrendForce analysis indicates that the proactive inventory strategy of Chinese module makers is driven by short-term shipments, which result in stronger purchasing motivation when prices rebound from their lowest point In the long term—apart from the goal of achieving domestic semiconductor production in China—module makers actively increase their inventory at low price points to strengthen cost competitiveness They continue to expand their wafer procurement volume to produce client SSDs, UFS, and eMMC products, and strive to secure orders from top-tier end manufacturers
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/
2023/06/01
TrendForce’s recent analysis reveals that purchasing momentum in the NAND Flash market has decelerated during 1Q23 Despite suppliers aggressively slashing prices to stimulate sales, the bit shipment volume of NAND Flash witnessed only a marginal growth of 21% over the quarter Coupled with a 15% drop in ASP, the NAND Flash industry registered a QoQ revenue decrease of 161%, amounting to about US$863 billion
SK Group (SK hynix & Solidigm) and WDC experienced a simultaneous fall in volume and price, leading to a reduction in revenue of more than 20% for each The first quarter saw SK Group’s NAND Flash revenue dwindle to US$132 billion, a 248% QoQ decline This decrease was due to sluggish PC market demand, which cut the revenue contribution from the previously dominating SSD sector from over 50% in 4Q22 to just 20–25% in 1Q23 WDC, likewise, felt the sting of the off-season, with NAND Flash revenue sinking by 211% to approximately US$131 billion
With demand from major end-use sectors like servers, laptops, and smartphones remaining stagnant, Samsung sought to bolster bit shipments by pushing high-capacity products However, this strategy resulted in an 183% decrease in ASP over the quarter and brought Samsung’s NAND Flash revenue down by 158% to around US$293 billion in 1Q23 Similarly, Kioxia grappled with weakened consumer demand, and despite an 18% rise in bit shipment volume, a substantial 203% reduction in ASP led to a 59% QoQ decrease in revenue, totaling about US$185 billion
Micron’s Q1 NAND Flash revenue fell significantly by 198% to US$890 million However, as PC and mobile customer inventories return to healthy levels, Micron expects its inventory peak to have been reached in 1Q23 and hopes to break from the oversupply situation by implementing ongoing production reduction measures
Looking ahead to 2Q23, TrendForce anticipates an increase in buyer purchasing intentions, spurred in part by Samsung’s recent foray into production reduction In particular, module manufacturers and PC OEMs appear to be leading the charge, with total NAND Flash bit shipment volume predicted to rise by 52% QoQ Despite this, ongoing inventory clearance pressures are expected to cause a further decline in ASP across all products As a result, TrendForce forecasts that Q2 revenue for the NAND Flash industry will continue its downward trend, with an estimated decrease of around 79% from the previous quarter
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/
2023/03/30
Although NAND suppliers have continued to roll back production, there is still an oversupply of NAND Flash as demand for products such as servers, smartphones, and notebooks is still too weak Therefore, TrendForce predicts that the ASP of NAND Flash will continue to fall in 2Q23, though that decline may shrink to 5~10% The key to supply and demand returning to a market equilibrium lies in whether NAND suppliers can cut back on production even more TrendForce believes if demand remains stable, then the ASP of NAND Flash will have an opportunity to rebound in 4Q23; if demand is weaker than expected, then ASP will take longer to recover
Client SSD: Currently, PC OEM’s have managed to liquidate most of their component inventory, and are now gearing up in preparation for mid-year sales events Suppliers are cutting prices to clear out their inventories of PCIe Gen 3 SSDs, which are gradually being phased out Meanwhile, prices of PCIe Gen 4 SSDs continue to face downward pressure due to a slow intake of new customer orders The continuous decline of QLC products in 1Q23 has also dragged down the prices of TLC products, and there is relatively little room for prices to keep falling in 2Q23 While it still remains unclear whether or not demand will recover, TrendForce projects that the prices of PC client SSDs will drop 5~10% in 2Q23
Enterprise SSD: TrendForce predicts that demand from Chinese CSPs will steadily increase as a result of China’s annual Two Sessions gathering In addition, the launch of AMD Genoa will continue to drive shipments of enterprise SSDs It is expected that prices will continue to fall in 2Q23 as supply exceeds demand; suppliers have sustained significant losses from sales, which has weakened their ability to negotiate TrendForce estimates that the price decline of enterprise SSDs will narrow to 8~13% in 2Q23
eMMC: Demand for small-capacity eMMCs has remained stable while demand for large-capacity products has been impacted by weak NB and smartphone markets Aggressive price undercutting between module houses has significantly driven down prices of small-capacity eMMCs in 1Q23, leaving not much room for further downwards movement next quarter Large-capacity eMMCs will experience a greater decrease in prices due to being linked to smartphone UFSs of the same capacity, even as suppliers actively push for sales TrendForce predicts that eMMC prices will decline by 5~10% in 2Q23
UFS: NAND suppliers will continue to push for sales of large-capacity UFSs to encourage customers to upgrade the storage capacity of their smartphone products The introduction of UFS 40 means that many flagship smartphone models will be seeing an upgrade in storage capacity Meanwhile, inventory levels of smartphone components have mostly returned to normal levels, and suppliers are debating whether to stock up for mid-year sales events and peak season demand in 2H23 TrendForce believes that suppliers may accelerate the bottoming of UFS prices as buyers decide how much they wish to purchase in the next quarter It is estimated that UFS prices in 2Q23 will fall between 8~13%
NAND Flash wafer: Inventory levels in module houses have returned to normal Module houses are gradually purchasing more components and creating low-price inventory—operating under the belief that demand for SSDs, memory cards, disks, and other products will recover in 2H23—in order to avoid absorbing inflated costs when prices rebound in the future NAND suppliers have managed to limit overstock by controlling bit output through delaying their transition to new processes and reducing wafer starts As a result, NAND Flash wafer contract prices are seeing shrinking declines TrendForce reports that NAND suppliers that have already implemented production cuts have had their contract prices fall to cash costs, and have avoided further losses from price cutting TrendForce estimates that contract prices of NAND Flash wafers in 2Q23 will largely level out
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/
2023/03/17
TrendForce’s latest investigations reveal that the global NAND Flash market has been facing a demand headwind since 2H22 In response, the supply chain has been scrambling to clear out inventory, driving down NAND Flash contract prices by 20–25% Enterprise SSD took the brunt of the fall with prices plummeting 23–28% Despite manufacturers lowering prices in an attempt to drive up demand, clients are hesitant to purchase more components for fear of overstock As a result, NAND Flash bit shipments rose by a mere 53% as ASP fell 228% Global NAND Flash revenue was reported to be US$1029 billion in 4Q22 — down 25% QoQ
TrendForce reports that Kioxia and Micron saw both a reduction in production and price in 4Q22 Kioxia’s revenue plunged 305% due to weak demand from PC and smartphone clients and data centers readjusting their inventory Micron generated a quarterly revenue of US$11 billion — a staggering 347% QoQ drop — that has led them to drastically decrease their capacity utilization rate for fabs Luckily, Micron was able to ship their 232-layer client SSDs in 4Q22 as scheduled, and with the 176-layer QLC enterprise SSD hot on its heels, Micron’s bit shipments are predicted to steadily improve in 2023 with their revenue climbing gradually quarter by quarter
Samsung has continued to push high-capacity products thanks to their cost advantage, leading to an increase in total bit shipments Nevertheless, they were unable to avoid the drop in ASP, generating revenue earnings of US$348 billion in 4Q22 — down 191% QoQ Samsung continues to hold the top position, retaining 338% of the market share, and currently has no plans to cut back on production Samsung’s competitors in the NAND Flash market have managed to ramp up production in recent years as a result of technological advancements, threatening Samsung’s position as top dog Evidently, this is why while the rest of the industry has slowed down production, Samsung continues to maintain capital expenditure and invest heavily in R&D, all to gain a greater advantage in technology and production capacity
SK Group (SK hynix & Solidigm) has similarly found itself affected by client destocking and the price war, posting a fourth quarter revenue of US$176 billion — down 309% QoQ Nonetheless, their bit shipments saw a quarterly increase of 67%, largely in part to a number of reasons: consumer electronics accounting for a higher percentage of SK hynix’s product portfolio, new smartphone products boosting demand, and enterprise SSDs being shipped on schedule Western Digital (WDC) also reported a 20% increase in bit shipments in 4Q22 despite the sudden dip in prices However, their NAND Flash revenue only hit US$166 billion — down 38% QoQ
NAND Flash revenue will continue to decrease heading into 1Q23 due to traditionally low first quarter
Kioxia, Micron, Western Digital, and SK hynix will continue cutting back on production moving into 1Q23, giving them an opportunity to alleviate their current overstock situation As a result, the drop in NAND Flash ASP should shrink to around 10–15% Unfortunately, given that first quarters are traditionally low because of low client purchasing power, this means growth in client orders will be constrained TrendForce predicts NAND Flash revenue will continue to see a decrease of 81% in 1Q23
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/
2023/01/05
TrendForce’s latest analysis of the NAND Flash market finds that most suppliers have already started to scale back production Due to this development, the vicious cycle of suppliers undercutting each other has been brought under control to some degree as well Therefore, the QoQ decline in the overall NAND Flash ASP for 1Q23 is currently projected to reach 10~15%, which is smaller than the QoQ decline for 4Q22 Regarding price trends of different NAND Flash products in 1Q23, prices of NAND Flash wafers are already at the cash cost level, so their decline will moderate sooner compared with other kinds of NAND Flash products Conversely, prices of enterprise SSDs will suffer the sharpest drop compared with other kinds of NAND Flash products because they represent a major source of inventory consumption and offer a relatively high profit margin
NAND Flash suppliers have been aggressively cutting production because the whole NAND Flash market witnessed a price collapse during 2H22 Also, compared with DRAM, NAND Flash has more price elasticity of demand Therefore, price slump will end sooner for NAND Flash than for DRAM
With regard to the client SSD segment, brands for notebook (laptop) computers have been passive in stocking up on SSDs because the demand for their devices is expected to remain fairly weak through 2023 Furthermore, the growth of the demand bits related to client SSDs will decelerate further moving into 2023, so the effect of suppliers’ production cuts on this segment is not expected to become immediately noticeable Therefore, supply will continue to outstrip demand for client SSDs In the aspect of product development, the mainstream products in the client SSD segment during 2023 are still going to be 512GB in capacity and based on the 176L 3D NAND technology Turning to cell architecture, QLC products have undergone some improvements in performance However, this also has the effect of exacerbating the decline in prices of 512GB SSDs Going forward, prices of client SSDs on the whole will keep falling as more suppliers offer higher-layer QLC products On the other hand, TrendForce has observed that some suppliers that have initiated production cuts are able to hold firm on prices of client SSDs Hence, the QoQ decline in prices of client SSDs will shrink to around 10~15% for 1Q23
In the enterprise SSD segment, buyers have repeatedly corrected down their orders since 4Q22 because server shipments have been sliding Furthermore, the built-out of data centers in China slowed down noticeably in 2022 due to the interferences caused by local COVID-19 outbreaks and government policies As a result, China’s demand for enterprise SSDs in 2022 was weaker compared with 2021 To alleviate the problem of excess inventory, suppliers made larger price concessions for 4Q22 enterprise SSD contracts in exchange for larger procurement quantities from North American buyers However, this move has taken away a portion of the demand that is reserved for 1Q23 Since the ASP of enterprise SSDs is still higher than the ASPs of various consumer NAND Flash products, suppliers still want to ramp up shipments of the former in order to maintain profitability There is a now fierce price competition in the enterprise SSD market as suppliers seek to capture more market share As a result, enterprise SSDs will also suffer the steepest price drop among NAND Flash products for 1Q23, with the QoQ decline coming to around 13~18%
Looking at the eMMC segment, the main sources of demand there are Chromebooks, TVs and networking devices Presently, these applications are not providing sufficient growth momentum to prop up eMMC prices In view of the persistently high inventory level for this kind of storage product, NAND Flash suppliers are willing to slash prices as long as there is still some room for profit TrendForce also points out that some module houses are undercutting eMMC prices in China with products made from low-priced wafers This kind of competition is exerting a certain amount of pressure on NAND Flash suppliers as well On the other hand, prices of low-capacity eMMC solutions are near the cost level, so there is not much room for further drops Going forward, the downward price pressure will concentrate on solutions that are 64GB or higher in capacity TrendForce projects that eMMC prices on the whole will drop by 10~15% QoQ for 1Q23
Turning to the UFS segment, the demand for smartphones is still in a slump, so most smartphone brands intend to keep their procurements of UFS solutions for the whole 2023 around the same amount as for 2022 Thus, the demand outlook of this segment for 2023 is lackluster Looking ahead, NAND Flash suppliers will continue to vigorously promote UFS solutions since the steady increase in the average NAND Flash content of smartphones has contributed significantly to the bit consumption of the entire NAND Flash market In particular, suppliers hope that there is sufficient price incentive to encourage Chinese smartphone brands to upgrade the storage capacity of their devices TrendForce has observed that the number of smartphone models featuring a 256GB storage capacity has risen, but these mostly belong to the high-end and flagship segments This trend will probably become more noticeable later on as smartphone brands launch new devices for 2H23 In general, the UFS segment will remain in oversupply during 1H23 TrendForce projects that prices of UFS solutions will drop by 10~15% QoQ for 1Q23
Lastly, in the NAND Flash wafer segment, module houses presently exhibit weak procurement momentum At the same time, sales have been depressed for retail SSDs and memory cards The effect of suppliers’ production cuts is expected to become more apparent in 1Q23, but strong inventory pressure is going to keep wafer prices low in the short term On the other hand, prices are now at the cash cost level for wafers that are mainstream in density NAND Flash suppliers are also selling at a loss for some large wafer transactions Going forward, suppliers will be more reluctant to accept deals that entail a loss as the overall supply-demand dynamics gradually returns to a balance TrendForce projects that contract prices of NAND Flash wafers will drop by about 3~8% QoQ for 1Q23 Compared with other categories of NAND Flash products, wafers will experience the smallest decline in 1Q23
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/
