TrendForce Reports: Shifting Landscape Ahead for NAND Flash Market

The semiconductor memory market is finally showing signs of recovery as the price of memory rebounds due to reduced production by suppliers. NAND Flash, one of the major memory products, is experiencing changes in its market dynamics and demand. Prices for NAND Flash chips have been steadily increasing since the third quarter of 2023. The future price trends will depend on suppliers’ production capacity utilization, considering the conservative market demand prospect for 2024.

In the NAND flash memory industry chain, there have been developments such as manufacturers indicating a willingness to raise prices or increase production capacity utilization. For instance, SIMO’s General Manager, Wallace C. Kou, stated that NAND Flash prices for the second quarter have already been settled and will increase by 20%. Some suppliers have started making profits in the first quarter, and most suppliers are expected to earn money after the second quarter. However, Phison’s CEO, Pua Khein Seng, warns that further price increases for SSD solid-state drives may reduce market demand. He suggests that NAND manufacturers should meet demand instead of allowing low supply and high demand to drive up prices.

Samsung’s Xi’an fab has significantly increased its operating rate, while Kioxia is considering adjusting its production reduction plan. Samsung Electronics’ NAND Flash fab in Xi’an, China, has restored its operating rate to around 70% after lowering it to 20-30% in the second half of 2023. This move comes as Samsung plans to upgrade the Xi’an fab to the 236-layer NAND process and kick-off large-scale expansion. Kioxia, on the other hand, expects the utilization rate of its NAND fab to return to around 90% by March 2024.

TrendForce predicts a quarter-on-quarter increase in contract prices for NAND Flash in the first quarter of 2024, ranging from 20-25%. Although the overall demand outlook for the second quarter remains conservative, NAND Flash suppliers have adjusted their production capacity utilization. NAND Flash buyers have also started replenishing their inventories in the first quarter, leading to a convergence of the quarter-on-quarter price increase in the second quarter to 10-15%.

Currently, the NAND Flash market is dominated by five major manufacturers, with Samsung and SK hynix holding the largest market shares. Samsung’s market share increased from 31.4% to 36.6% in the fourth quarter of 2023, while SK Group’s market share increased from 20.2% to 21.6%. Western Digital, Kioxia, and Micron follow behind. It is worth noting that Western Digital’s plan to merge with Kioxia has not been concluded yet, but there are talks of restarting merger negotiations.

Western Digital recently announced its plan to split its NAND Flash business and focus on its core HDD business. This move has sparked discussions in the industry as the company believes it will accelerate innovation and bring new growth opportunities. The divestiture is expected to be completed in the second half of 2024.

In terms of industry revenue, NAND Flash industry revenue reached USD 11.49 billion in the fourth quarter of 2023, a 24.5% increase from the previous quarter. This growth was driven by the recovery of terminal demand, year-end promotions, price hikes, and increased shipment of bits compared to the same period last year. Looking ahead to the first quarter of 2024, TrendForce predicts a 20% quarter-on-quarter increase in NAND Flash industry revenue due to the improvement in supply chain inventory levels and increasing purchase orders from customers to avoid supply shortages and rising costs.

Background Information

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About Phison: Phison Electronics Corporation, established in 2000 in Taiwan, is a global leader in NAND Flash controller ICs and storage solutions. Phison's innovations in flash memory and controllers have made them a key player in the storage industry, providing technology that powers various storage devices.

  

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About Samsung: Samsung, a South Korean multinational conglomerate, has established itself as a global leader in various industries, including electronics, technology, and more. Founded in 1938, Samsung's influence spans from smartphones and consumer electronics to semiconductors and home appliances. With a commitment to innovation, Samsung has contributed products like the Galaxy series of smartphones, QLED TVs, and SSDs that have revolutionized the way we live and work.

  

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About SK hynix: SK Hynix is a important South Korean semiconductor company known for its innovative contributions to the global technology landscape. Specializing in the production of memory solutions, SK Hynix has played a vital role in shaping the semiconductor industry. With a commitment to research and development, they have continuously pushed the boundaries of memory technology, resulting in products that power various devices and applications.

  

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About Western Digital: Western Digital, established in 1970, is a important data storage solutions provider known for its wide range of hard drives and solid-state drives. Catering to various applications, from personal computers to enterprise storage systems, Western Digital emphasizes data management and security. With a reputation for reliability and innovative solutions, the company has been pivotal in shaping the storage industry. Their products are trusted by individuals, businesses, and data centers worldwide

  

Technology Explained

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HDD: A Hard Disk Drive (HDD) is a classic data storage device that utilizes spinning disks, or platters, coated with a magnetic material to store and retrieve data. An actuator arm with read/write heads accesses data by moving over the spinning platters. HDDs offer large storage capacities at a comparatively lower cost per gigabyte, making them suitable for applications where massive data storage is required, such as servers and desktop computers. However, HDDs are slower in terms of read and write speeds compared to SSDs due to the mechanical nature of their operation. They are more susceptible to physical shocks and are less energy-efficient due to the need to constantly spin the platters.

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NAND: NAND technology is a type of non-volatile memory that is used in many computer applications. It is a type of flash memory that is used to store data in a non-volatile manner, meaning that the data is not lost when the power is turned off. NAND technology is used in many computer applications, such as solid-state drives, USB flash drives, digital cameras, and memory cards. It is also used in many embedded systems, such as cell phones, tablets, and other consumer electronics. NAND technology is a reliable and cost-effective way to store data, making it a popular choice for many computer applications.

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SSD: A Solid State Drive (SSD) is a modern data storage device that employs flash memory technology to store data electronically. Unlike traditional hard disk drives (HDDs), SSDs have no moving parts, resulting in significantly faster read and write speeds. This leads to quicker boot times, faster application loading, and smoother overall system performance. SSDs are known for their durability, shock resistance, and energy efficiency, making them ideal for laptops, ultrabooks, and other portable devices. They come in various form factors, including 2.5-inch, M.2, and PCIe cards, and are favored for their reliability, quiet operation, and reduced heat generation