NAND flash memory may stabilize in Q4, Price remains the same or rises 0~5%

In response to the dwindling demand for NAND flash memory, Samsung has declared an augmentation in its production cuts by 50% starting in September. This reduction predominantly targets products with fewer than 128 layers. It’s postulated that other manufacturers will emulate this curtailment in the fourth quarter to expedite inventory reduction. Consequently, it’s anticipated that the prices of NAND flash memory may either stabilize or witness a modest upswing in the fourth quarter, with a projected increase ranging between 0 to 5%.

According to forecasts by TrendForce, the price rebound of NAND flash memory is poised to precede that of DRAM. As the losses endured by NAND flash suppliers burgeon and the selling price verges on production cost, manufacturers will likely opt for enhanced production cutbacks to halt the price decline and catalyze a rebound. In fact, the contract prices of NAND flash wafers experienced a resurgence in August. As production cuts amplify, client restocking efforts might rejuvenate, buttressing a continuous ascent in NAND flash wafer contract prices for September. For this uptrend to persist into 2024, sustained production reductions are imperative, bolstered by a substantial replenishment of enterprise-grade SSD orders.

However, this year’s market demand for NAND flash memory in terms of bit growth is not projected to surge. Coupled with the marginalization of general-purpose servers by AI servers, the overall NAND flash market remains lackluster this year. By the end of the third quarter, the average price of NAND continued its descent, exacerbating manufacturers’ losses.

Using Samsung as an exemplar, if their aim is to efficaciously pare down inventory before year’s end, relying on intensified client restocking seems implausible. Hence, stringent production oversight emerges as the most viable strategy to recalibrate supply and demand. A significant production cutback might prompt a price resurgence for products chiefly reliant on Samsung’s flash memory, potentially invigorating the overall bit shipment volume in the fourth quarter, thus attenuating losses.