NAND Flash contract prices dropped 15-20 percent in the second quarter of 2018, according to DRAMeXchange, a division of TrendForce.
NAND Flash bit shipments bounced back as Chinese smartphone brands stocked up on high-density products.
The average selling prices of NAND Flash products are expected to drop further by nearly 10 percent, DRAMeXchange analyst Ben Yeh said.
Shipments of mainstream consumer electronics products such as smartphones and notebooks during Q3 are not expected to increase significantly. Memory module makers will be carrying high levels of inventory.
ASP drops are not totally negative news for the NAND Flash industry. Mobile manufacturers took the opportunity to raise the storage specifications of their devices to utilize the decline in prices of NAND Flash due to oversupply during Q2.
Products of 128GB or higher capacity have reached a penetration rate of over 10 percent. China based phone makers such as OPPO, Vivo and Xiaomi are expected to adopt uMCP actively, bringing the average content per box of mid-to-high-end smartphone models up to 256GB or even 512GB in H1 2019.
In the SSD market, the price reduction of NAND Flash would also improve the shipments of high-capacity (8TB, 16TB) applications for servers. The notebook market would see greater adoption of SSDs in computer systems, and the shares of those with 256/512GB SSDs would be expanding, up from current 128/256GB.
Samsung’s NAND Flash bit shipments grew 15 percent quarter on quarter in Q2 due to the increase in the density per device among Chinese branded smartphones and demand rebound in the server and data center market.
Samsung’s NAND Flash ASP dropped by more than 10 percent due to the general oversupply situation and the price decline for various products. Samsung’s NAND Flash revenue rose 1.8 percent to $5.93 billion.
SK Hynix’s bit shipments surged 19 percent due to demand from Chinese smartphone brands and strong SSD sales. SK Hynix’s NAND Flash ASP dropped by 9 percent. SK Hynix’s NAND Flash revenue rose 11.8 percent to $1.73 billion.
SK Hynix’s 72-layer 3D NAND products are gaining traction in the SSD market and are forecast to account for more than 50 percent of the supplier’s Enterprise SSD shipments by the end of this year.
Toshiba’s bit shipments grew by more than 10 percent. Toshiba’s ASP registered 5 percent dip due to falling contract prices for wafers, SSDs, and eMMC/UFS products. Toshiba’s NAND Flash revenue rose 3.3 percent to $3.14 billion.
Western Digital’s NAND Flash bit shipments rose 5 percent because of sales gains in the SSD and retail markets, but ASP dropped 4 percent. Western Digital’s NAND Flash revenue grew 0.3 percent to $2.37 billion.
The report said there is a possibility that the Toshiba-Western Digital alliance will slow down the pace of capacity building to prevent the worsening of the oversupply situation.
Micron’s sales of high-density products for the mobile application nearly doubled thanks to smartphone brands upgrading their devices.
Micron’s strategy will be to focus more on increasing the shipment share of mobile memory solutions while scaling back the shipment shares of chips and wafers that go to the channel market.
Micron posted stellar sales result in the SSD market as well. In addition to raising the sales of Enterprise SSDs, the supplier will be promoting QLC 3D-NAND SSDs to boost its high-density product shipments. Micron’s NAND Flash revenue rose 7.6 percent to $1.94 billion.
Intel achieved more than 15 percent growth in its NAND Flash bit shipments on account of the steady growth of its server SSD sales.
However, a greater part of the 2Q18 server SSD shipments is made up of low-price products due to the imbalance in Intel’s product mix. This led to 6 percent drop in Intel’s NAND Flash ASP. Intel’s NAND Flash revenue rose 6.8 percent to $1 billion plus.
Intel also continues to work on its 3D XPoint and will likely be its leading advocate after the split with Micron. However, getting more customers to adopt this technology will be much more difficult if there is no other partner willing to invest in it.
