NAND flash memory prices to soar in Q2

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TrendForce, a market research firm, said that after entering the fourth quarter of 2021, due to the unresolved problem of capacity crunch, the impact of continued spare parts shortages has expanded to the NAND flash memory market. At the same time, market demand has begun to weaken, and the overall inventory level gap has continued to widen in the past few months, eventually causing related NAND flash memory companies to reduce orders to reduce inventory.

Perhaps TrendForce did not expect that after entering 2022, Samsung closed its factories due to the COVID-19 epidemic, and recently Western Digital and Kioxia encountered production material pollution incidents. According to announcements from Western Digital and Kioxia, components containing impurities may be used in the specific production process of BiCS Flash, at least 6.5 exabytes of flash memory was contaminated, affecting 3D NAND flash memory production lines at factories in Yokkaichi and Kitakami, Japan.

According to TrendForce, the affected 3D NAND flash memory production accounted for 13% of Western Digital and Kioxia’s production in the first quarter and about 3% of the total production for the year. As the production line recovery time is yet to be determined, the exact loss figures have yet to be aggregated, so the scope of the final impact may be larger. TrendForce expects the decline in NAND flash memory prices to narrow to 5% to 10% in the first quarter, lower than previously expected.

Currently, Western Digital and Kioxia mainly provide client-side SSD and eMMC products. Western Digital is the second largest client-side SSD and the largest client-side eMMC supplier, and subsequent supply will inevitably be affected. Client SSD prices are likely to remain firm even as overall PC demand declines in the second quarter of this year. In addition, Kioxia’s enterprise-grade PCIe 4.0 SSD has recently passed multiple customer verifications, and its market share should have increased in the second quarter, but this incident may affect subsequent customer purchases.

It is rumored that Western Digital and Kioxia have suspended spot market quotations and are waiting for relevant assessments, which may stimulate spot prices to rise in the future. TrendForce believes that orders on a quarterly basis will not be affected in the short term, but the price of NAND flash memory in the second quarter is likely to turn from falling to rising, and it is expected to surge by 5% to 10%.

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