TrendForce: NAND flash memory prices will turn down in 4Q21

According to recent market research by TrendForce, shipments of consumer electronics such as smartphones, TVs, and Chromebooks in the second half of this year were lower than expected, at the same time, the demand for retail storage products including memory cards and U disks is still in a sluggish state, and the data center and enterprise markets are the only areas with relatively strong demand. As the inventory level rises, the purchasing power of buyers of NAND flash memory will decline in the future. This weakening of demand has also eased the supply shortage of NAND flash memory master chips. TrendForce predicts that the price of NAND flash memory products will begin to fall in the fourth quarter of 2021.

TrendForce said that with the increase in the COVID-19 vaccination rate, countries in North America and Europe will gradually relax the requirements for COVID-19 protection, which has led to a decline in the demand for Chromebooks, and laptops, in general, will also be affected. Due to the intensification of the epidemic in Southeast Asia, the production of capacitors, resistors, inductors, and other components will be impacted, affecting manufacturers’ shipments.
At present, NAND flash memory suppliers are increasing the production capacity of products with 128 layers or above, and the supply of SSDs has gradually exceeded demand. It is expected that SSD contract prices in the consumer market will drop by 3% to 8% from the previous month. SSD orders in the enterprise market have increased for two consecutive quarters, but inventory is also rising. Demand has also begun to weaken in the fourth quarter of this year, and shipments are expected to drop by 9%. It is expected that the SSD contract price in the enterprise market will increase by less than 5% from the previous month due to the lack of parts, not the increase in demand.

In addition, the price of eMMC is expected to drop by 5% to 10% in the case of a substantial decline in terminal demand; with increasing supply and decreasing demand, UFS prices are expected to fall within 5%, in the case of a decline in major demand, the price of NAND flash memory wafers will fall by 10% to 15%. As the demand for products such as laptops, smartphones, and TVs is less than expected, the inventory pressure of NAND flash memory wafers has gradually increased, and almost no suppliers have proposed active supply. YMTC, WDC, and Micron have begun to provide samples of 112, 128, and 176L product samples for testing to further optimize the cost structure and make room for price reductions.