NAND Flash Industry Revenue Surges 28.1% in 1Q24, Continued Growth Anticipated in Q2

The adoption of enterprise SSDs by AI servers has increased, resulting in a surge in large orders and a significant boost in NAND Flash prices and shipment levels, with Micron surpassing Western Digital to claim the fourth spot and Samsung maintaining its market leadership position, while SK Group and Kioxia also saw notable revenue growth in the first quarter of 2024.

Significant boost in NAND Flash prices and shipment levels
Notable market ranking changes, with Micron surpassing Western Digital
Expected revenue growth for SK Group and Kioxia in the second quarter

According to a recent report from TrendForce, the adoption of enterprise SSDs by AI servers has been on the rise since February, resulting in a surge in large orders. Not only that, but PC and smartphone customers have also been increasing their inventory levels in order to manage the rising prices. As a result, NAND Flash prices and shipment levels saw a significant boost in the first quarter of 2024, with quarterly revenue increasing by 28.1% to reach an impressive $14.71 billion.

The market rankings saw some notable changes this quarter, with Micron surpassing Western Digital to claim the fourth spot. Micron’s success can be attributed to slightly lower prices and shipments compared to its competitors in the previous quarter, resulting in a remarkable 51.2% QoQ revenue growth to $1.72 billion in the first quarter of 2024, which was the highest among its peers. Samsung, on the other hand, maintained its market leadership position with a 28.6% QoQ revenue jump to $5.40 billion. This growth was driven by continued inventory build-up among buyers and a revival of enterprise SSD orders.

Despite a cautious outlook for consumer product orders in the second quarter, Samsung is expected to experience over 20% revenue growth, thanks to the rising NAND Flash contract prices. SK Group, which includes SK hynix and Solidigm, witnessed a significant 31.9% QoQ increase in revenue to $3.27 billion in the first quarter, driven by strong smartphone and server orders. Solidigm’s unique floating gate QLC architecture played a crucial role in sustaining robust demand for high-capacity enterprise SSDs. In the second quarter, SK Group is expected to outpace other suppliers with an anticipated revenue jump of around 20%.

Kioxia’s output in the first quarter was still affected by production cuts from the previous quarter, resulting in a modest 7% QoQ increase in shipments. However, the rising NAND Flash prices led to a notable 26.3% QoQ rise in revenue to $1.82 billion. For the second quarter, Kioxia expects to see a revenue growth of approximately 20%, supported by increased supply bits and more flexible pricing, which will further expand enterprise SSD shipments.

Western Digital faced a decline in retail market demand starting in February, which impacted its shipments in the first quarter. Nonetheless, the rising NAND Flash contract prices led to a 2.4% QoQ revenue increase, reaching $1.71 billion. Despite a cautious market outlook for the PC and smartphone sectors, Western Digital has plans to boost its enterprise SSD product development in order to drive future growth. However, due to longer verification times for enterprise products, short-term shipment growth is limited, and Q2 revenue is expected to remain flat.

Looking ahead, PC and smartphone customers have already taken steps to raise their NAND Flash inventory levels for the second quarter. However, the growth in end-consumer demand has fallen below expectations, leading to more conservative buying from branded makers. On the other hand, the surge in large enterprise SSD orders continues to drive up the average selling price (ASP) of NAND Flash by 15%. TrendForce forecasts that Q2 NAND Flash revenue will increase by nearly 10% QoQ.

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Background Information

About Kioxia:

Kioxia is a global leader in flash memory and solid-state drive (SSD) technology, originating from Toshiba Memory Corporation, which rebranded as Kioxia in 2019. Headquartered in Tokyo, Japan, Kioxia develops high-quality memory solutions, serving various markets including consumer electronics, data centers, and industrial applications. The company is known for pioneering NAND flash memory technology, focusing on innovation, data storage solutions, and sustainability.

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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

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Technology Explained

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