NAND Prices Expected to Rise 10% in Q3 Due to Production Cuts

Taiwan's TrendForce: "Significant Improvement in NAND Supply-Demand Balance"

It has been forecasted that NAND prices could rise by up to 10% in the third quarter of this year, as a result of memory manufacturers' production cuts and inventory reductions in the first half of the year.

According to the Taiwanese market research firm TrendForce on July 9, overall NAND prices are expected to increase by 5 to 10% in the third quarter of this year. This is a slight increase compared to the previous quarter's rise of 3 to 8%.

TrendForce stated, "After production cuts and inventory reductions by manufacturers in the first half of the year, the NAND flash market has seen significant improvement in the balance of supply and demand," and added, "As memory suppliers shift their production capacity to high-margin products, the overall supply of NAND in circulation has decreased."

Samsung QLC 9th Generation V-NAND. Samsung Electronics

Since the second half of last year, the NAND market experienced a decline in demand due to end customers stockpiling inventory, while suppliers faced inventory pressure, resulting in a temporary drop in prices. Samsung Electronics, SK Hynix, Kioxia, and Micron, among others, were directly hit by the market downturn, leading to decreased NAND sales. However, as suppliers have continued to adjust NAND supply recently, it is analyzed that the upward trend in prices has become established.

By product, prices for enterprise solid-state drives (SSDs), which saw little change in the previous quarter, are expected to rise by 5 to 10% in the third quarter. This is because demand for enterprise SSDs used in servers could increase, driven by the growing trend of artificial intelligence (AI) data centers.

Consumer SSD prices are expected to rise by 3 to 8% in the third quarter, due to replacement demand stemming from the end of Windows 10 support and the release of new central processing units (CPUs). In contrast, demand for mobile and smartphones remains weak, so prices for eMMC and UFS are expected to increase by only 0 to 5%.

Unlike the second quarter, when prices for 3D (three-dimensional) wafers, a material used in NAND, rose by 15 to 20%, manufacturers focusing on high-margin products are now taking a conservative approach to wafer purchases. As a result, wafer prices in the third quarter are forecasted to increase by a more modest 8 to 13% compared to the previous quarter.