NAND Flash Contract Prices Projected to Surge in Q4, but Challenges Loom for 2024

NAND Flash contract prices are expected to experience a significant surge in the fourth quarter of 2023, TrendForce said.
NAND Flash Contract Prices in Q4 2023The anticipated hike in NAND Flash contract prices ranges from approximately 8 percent to 13 percent, attributing this increase to stringent production controls exercised by suppliers. However, the outlook for 2024 suggests challenges in maintaining this upward price trajectory due to various factors.

The continuation of this rising trend in the NAND Flash market is expected to depend on persistently reducing output and the resurgence of demand for enterprise SSDs within the server market. Without solid demand, the momentum of this price surge could falter in the upcoming year, impacting the industry and consumers.

Client SSD Prices Rising Amidst Supplier Promotions

Active price increases by suppliers and module makers of NAND Flash have spurred PC OEMs to stock up on client SSDs at relatively lower price points, leading to higher procurement volumes than actual demand. Suppliers aiming to expand bit shipments have launched promotions, leaving little room for further price declines. Both high-end and low-end client SSD products are expected to increase concurrently, with 4Q23 PC client SSD contract prices projected to rise by 8 percent to 13 percent.

Enterprise SSD Demand Grows in Q4

Demand for enterprise SSDs is expected to grow in the fourth quarter, especially in North America and China. North American cloud service providers (CSPs) still hold significant amounts of inventory, but demand from server brands has been gradually increasing. In China, orders have picked up as CSPs’ inventories have dropped to reasonable levels. Overall, procurement demand for enterprise SSDs in the fourth quarter is anticipated to grow, leading to a projected rise in contract prices of approximately 5 percent to 10 percent.

eMMC Prices Surge Due to Increased Costs and Lower Availability

The second half of the year is primarily reliant on TV shipments and certain smartphone demand for eMMC support. Suppliers’ aggressive price-hiking stance and increased production costs have led to higher eMMC prices. Buyers, with relatively low inventory, have been compelled to procure in advance, driving up prices. Due to dwindling availability and production costs extending to mainstream processes, eMMC contract prices in 4Q23 are expected to grow by approximately 10 percent to 15 percent.

UFS Prices Expected to Rise with New Releases and Seasonal Stocking

The fourth quarter is poised for a procurement boost, driven by new releases, seasonal stocking, and brand strategies to defend market share. Smartphone OEMs are increasing component reserves to safe levels, leading to a price increase in UFS 4.0 due to its limited supply and reliance on advanced manufacturing processes. Mature UFS products are also seeing price adjustments and increases. It is estimated that UFS contract prices will see a quarterly increase of 10 percent to 15 percent in the fourth quarter.

NAND Flash Wafer Prices to Skyrocket Due to Supply Tightness

After Samsung’s substantial production reduction, other suppliers have followed suit, adopting a conservative approach to wafer investment. This reduction in production has led to a pronounced structural tightness in supply across the market, granting suppliers significant leverage over pricing. Observations for the fourth quarter indicate a dearth of affordable supplies available for purchase, prompting suppliers to swiftly elevate prices. Projections suggest an uptick in NAND Flash wafer contract prices of approximately 13 percent to 18 percent in the fourth quarter.

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