Recessionary forces sending NAND flash prices down
Suppliers of NAND flash memory wafers are starting to cut prices due to weak demand, according to market analysis firm TrendForce.
TrendForce said that demand has been weak since March 2022 and the price of NAND flash wafers is expected to begin falling on May and the supply of NAND flash will overtake demand in 2H22. The price decline of NAND flash wafers in 3Q22 is expected to be between 5 and 10 percent.
This is despite a Kioxia contamination event late January that was expected to send NAND flash memory prices up by between 5 and 10 percent (see Flash memory price to rise on Kioxia material contamination).
Since then rising inflation and the conflict between Russia and Ukraine has sent forecasts downwards for consumer product sales in the 2H22, TrendForce said. The company expects prices for solid-state drives (SSDs), embedded multimedia cards (eMMC) and universal flash storage (UFS) to be flat in 3Q22.
Notebook computers and smartphones are some of the biggest users of flash memory.
While the return to the workplace is driving some demand for office notebooks the move out of the home and sated demand is having a negative effect on consumer notebooks such as Chromebooks, TrendForce said. Overall demand for notebooks in 2022 will be lower compared to demand in 2021.
Smartphone production, which predominantly takes place in China is being impacted by government lockdowns due to an insistence on a zero-Covid policy. This is resulting in repeated downward revisions of global smartphone production for 2022.
Despite this Samsung continues to invest in flash memory production in P2L fab in South Korea.
Yangtze Memory Technologies (YMTC) also plans to expand wafer production in 2H22 because its 128-layer 3D-NAND device has reached the company’s performance and yield goals (see China’s YMTC takes lead in 3D-NAND memory).
This has allowed YMTC to become a tier-1 supplier to smartphone makers. YMTC also plans to accelerate production at its second factory in Wuhan, TrendForce said. Therefore NAND flash will face oversupply in 2H22.
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