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NAND flash prices could drop up to 20% in Q4

TrendForce: Hope for cheaper consumer SSDs intensifies

Most manufacturers of NAND flash can expect to see their products cross into loss territory before the end of this year, according to researchers at TrendForce.

The result will likely culminate in a 15 to 20 percent cut in pricing during Q4 of 2022, it predicts.

One of the most pressing reasons is that NAND flash is currently oversupplied, TrendForce said in its latest report, or to put it another way, there is now an overmatch of supply to demand. While this might be good news for buyers right now, it means suppliers are likely to soon reduce production as a way to limit their losses, which will eventually send prices back up again.

Coupled with oversupply, overall demand is falling away. PC makers are also currently pessimistic regarding the level of demand next year and regard reducing inventory of client SSDs as a top priority, according to the same research.

However, the picture is mixed with regard to enterprise SSDs: purchase volume has also declined in this segment due to the expectation that server shipments are set to fall in 4Q22, but manufacturers are eager to expand sales of enterprise SSDs, Trendforce claims.

US manufacturers began providing 176-layer products to clinch market share and Solidigm released an enterprise SSD built with SK hynix 128-layer silicon for customer verification. At the same time, Kioxia is partnering with North American cloud service providers for PCIe 4.0 SSD.

Price competition among suppliers is bound to intensify as more products enter the market, and so TrendForce predicts 15-20 percent fall in pricing during 4Q22 across both client and enterprise SSDs.

In other sectors, TrendForce said that sluggish demand for chromebooks and TVs is hitting eMMC flash products, and that inventory pressure forced manufacturers to offer lower prices in 3Q22 for fixed-volume sales up to the end of the year. It estimates eMMC prices will fall by approximately 13-18 percent in 4Q22.

A similar situation is unfolding for Universal Flash Storage (UFS), the chief application of which is the smartphone market. Traditional peak season sales of smartphones have fallen short of past performance, it claims, and so makers are stuck with high inventory levels of both devices and components, and their desire to buy UFS has therefore decreased.

There is almost pessimism about demand next year, and flash manufacturers look set to intensify price incentives to stimulate stocking momentum, which is predicted to translate into price drops of 13-18 percent, with further cuts a possibility.

As for NAND flash wafers, the market situation is similarly gloomy, the TrendForce report states. Demand is stagnant for products such as SSDs, memory cards, and drives at the retail end as consumers have begun to rein in spending.

However, TrendForce claims that manufacturers have continued to increase wafer supply and the pace of migration to a greater number of layers has also continued. Since a downward trend in pricing is inevitable, it believes manufacturers will be forced to accelerate process migration to optimize cost structure.

Manufacturers have been slashing prices over the past quarter, resulting in wafer contract pricing approaching the factory cost. TrendForce said it expects to see suppliers accelerate price drops, with NAND Flash wafer pricing in 4Q22 estimated to fall 20-25 percent versus the previous quarter. ®

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