NAND Prices Expected to Rise Up to 10% in Q3 Due to Memory Manufacturers' Production Cuts

Market Research Firm 'TrendForce' Forecasts
Slightly Higher Rise Than Q2's 3-8%
"Significant Improvement in NAND Market Supply-Demand Balance"

There are projections that NAND prices will rise by up to 10% in the third quarter of this year, driven by memory manufacturers' production cuts and inventory reduction efforts in the first half of the year.

SK Hynix 321-Layer 4D NAND. Photo by SK Hynix

According to TrendForce, a Taiwanese market research firm, on July 9, overall NAND prices in the third quarter of this year are expected to increase by 5 to 10%. This represents a slight rise compared to the previous quarter's increase 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 between supply and demand," adding, "As memory suppliers shift production capacity to high-profit products, the overall supply of NAND in circulation has decreased."

Since the second half of last year, the NAND market experienced weakened demand due to end customers stockpiling inventory, while suppliers faced inventory pressure, resulting in a temporary price decline. Companies such as Samsung Electronics, SK Hynix (including Solidigm), Kioxia, and Micron saw a decrease in NAND segment sales due to the industry downturn.

However, analysts say that the recent ongoing efforts by suppliers to control NAND supply have set the stage for a price increase. By product, the price of enterprise solid-state drives (SSDs), which saw little change in the previous quarter, is expected to rise by 5 to 10% in the third quarter. Demand for enterprise SSDs used in servers may gradually increase due to the growing trend of artificial intelligence (AI) data centers. TrendForce noted, "Shipments of Nvidia's Blackwell platform are increasing each quarter, and demand for general-purpose servers is also expanding in North America," adding, "Strong order momentum from major customers in China is expected to continue through the second half of the year, further boosting demand for enterprise SSDs."

8th generation V-NAND based automotive SSD developed by Samsung Electronics. Photo by Samsung Electronics

Additionally, consumer SSD prices are expected to rise by 3 to 8% in the third quarter of this year, driven by replacement demand resulting from the end of Windows 10 support and the launch of new central processing units (CPUs). In contrast, demand for mobile and smartphones remains weak, so eMMC and UFS prices are likely to see only a 0 to 5% increase. The price of 3D (three-dimensional) wafers, a key NAND material, which rose by 15 to 20% in the second quarter, is projected to increase by a more modest 8 to 13% in the third quarter compared to the previous quarter.