[News] NAND Flash Wafer Surges 25% in November – Continued Price Increases Depend on Manufacturers’ Expansion

2023-12-11 Semiconductors editor

According to TechNews’ report, in the midst of production cutbacks by Samsung, SK Hynix, and Micron, NAND Flash wafer prices are surging.

As the traditional peak season for end-user stockpiling comes to an end, memory module manufacturers wish to position themselves favorably during a dip in demand. However, the reduced supply resulting from production cutbacks paradoxically elevates the demand for NAND Flash, intensifying the momentum of price rebounds. Memory module manufacturers are left with no choice but to accept the price increases imposed by memory manufacturers.

Fueled by the expectation that memory manufacturers will continue to raise prices, memory module manufacturers continue aggressive purchasing, contributing to an upward price trend in December.

Major memory manufacturers Samsung, SK Hynix, and Micron had previously announced significant production reduction plans. Samsung initiated a decrease in NAND Flash production from the second quarter and further expanded the reduction to 50% of total capacity in September, focusing mainly on products with less than 128 layers. This move instilled confidence in price hikes among industry peers.

Due to the unexpectedly substantial reduction in production by major memory manufacturers, coupled with generally low inventory levels on the client side, NAND Flash prices continue to rise.

In the latter half of this year, the demand for Mobile DRAM and NAND Flash (eMMC, UFS) has not only been driven by the traditional peak season but also stimulated by the production expansion goals of other Chinese smartphone brands, including the Huawei Mate 60 series. This sudden influx of demand is contributing to the price hikes in fourth-quarter contracts.

The most significant price surge in this wave is undoubtedly in NAND Flash wafer prices. According to the latest research from TrendForce, the current industry situation indicates that module manufacturers’ inventories have rapidly depleted due to increased orders from customers. This has prompted module manufacturers to turn to memory manufacturers, requesting expanded supply.

However, with memory manufacturers persisting in their production reduction strategies, the imbalance between supply and demand has led to a robust rebound in NAND Flash wafer prices in the fourth quarter. According to TrendForce’s data, the month of November alone witnessed a price increase of over 25% for NAND Flash wafers.

Industry sources reveal that in the current scenario of limited supply and significantly increased demand, module manufacturers have no choice but to accept the forceful price hikes imposed by memory manufacturers. The industry, anticipating that memory manufacturers will continue to raise prices, has resulted in a situation where “Everyone just keeps scrambling for inventory.”

Based on the current market conditions, TrendForce believes that in December, with tight supply, NAND Flash prices will continue to rise. However, whether prices will continue to surge significantly in the first quarter next year depends on the production reduction strategies of NAND manufacturers and the state of demand.

It is reported that there are industry rumors suggesting that some memory manufacturers are considering increasing production capacity due to the strong downstream demand. If memory manufacturers decide to increase its capacity earlier, coupled with unclear improvements in demand, the extent of price increases may be noticeably limited.

(Photo credit: Samsung)

Please note that this article cites information from TechNews.