NAND Flash


2024-04-23

[News] AI Trend Drives Market Demand, Samsung NAND Flash Utilization Exceeds 90%

According to a report from Korean media ETNews citing industry sources, it has indicated that Samsung Electronics has recently increased the capacity utilization rate of NAND Flash to over 90%, a further increase from the first quarter’s 80%.

Previously, Korean media including ETNews and The Elec held a relatively optimistic view of Samsung Electronics’ NAND Flash business, reporting that the operating rate of the Xi’an plant had reached 70%. However, the Chosun Daily has a different perspective, suggesting that Samsung Electronics continues to maintain its plan of reducing production by 50%.

According to the same report from ETNews, some NAND Flash fabs of Samsung are currently operating at full capacity, significantly better than the lowest utilization rate of 60% seen in 2023. Reportedly, the capacity utilization rate of the Xi’an plant in China has notably increased, followed by a gradual recovery in the NAND Flash capacity at Samsung’s Pyeongtaek facility in South Korea.

The report further cited another industry source who noted that downstream customers’ inventories of NAND Flash have essentially been depleted, leading to a balanced supply-demand trend. This is reportedly a key driver behind Samsung’s ongoing increase in capacity utilization.

The primary reason for the rise in NAND Flash market demand is attributed to the AI trend driving increased demand for enterprise solid-state drives (SSDs) from related businesses. This includes cloud computing service providers in North America and China increasing their purchases of enterprise storage to meet market demands.

As per TrendForce’s press release in March, it has projected a strong 13–18% increase in Q2 NAND Flash contract prices, with enterprise SSDs expected to rise highest. Despite Kioxia and WDC boosting their production capacity utilization rates from Q1 this year, other suppliers have kept their production strategies conservative. The slight dip in Q2 NAND Flash purchasing—compared to Q1—does not detract from the overall market’s momentum, which continues to be influenced by decreasing supplier inventories and the impact of production cuts.

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(Photo credit: Samsung)

Please note that this article cites information from ETNews.

2024-04-17

[News] Korean NAND Flash Manufacturers Cautiously Increase Wafer Input, Capacity Utilization Maintains Around 50%

According to a report from South Korean media The Chosun Daily, Samsung Electronics is set to increase wafer input by approximately 30% this quarter at its NAND Flash production lines in Pyeongtaek, South Korea, and Xi’an, China. However, Samsung remains cautious about further production increases to avoid impacting NAND Flash price trends.

The report indicates that while Samsung’s NAND Flash production lines can exceed 2 million wafers in a quarter at full capacity, internal targets for wafer output in the second to fourth quarters are capped at 1.2 million wafers each, maintaining overall utilization rate at around 50%.

Market expectations cited in the same report suggest that Samsung Electronics will reaffirm its stance on reducing NAND Flash production during the first quarter earnings call later this month. In the previous earnings call, Samsung noted persistent high levels of NAND Flash inventory among major customers, necessitating continued aggressive production cuts.

The same report further indicates that SK hynix has set a quarterly cap of around 600,000 wafers for NAND Flash production, with overall utilization rate ranging between 50% and 60%.

As per TrendForce’s data, it has projected a strong 13–18% increase in Q2 NAND Flash contract prices, with enterprise SSDs expected to rise highest. Despite Kioxia and WDC boosting their production capacity utilization rates from Q1 this year, other suppliers have kept their production strategies conservative. The slight dip in Q2 NAND Flash purchasing—compared to Q1—does not detract from the overall market’s momentum, which continues to be influenced by decreasing supplier inventories and the impact of production cuts.

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(Photo credit: Samsung)

Please note that this article cites information from The Chosun Daily.

2024-04-17

[News] Memory Manufacturers’ Price Hikes Prompt Backlash, Module Suppliers Hesitate to Follow

Amid the memory market’s gradual recovery, memory manufacturers are aggressively increasing prices back to pre-reduction levels and achieve profitability. According to a report from TechNews, however, module suppliers are reportedly resisting these price hikes and considering ways to negotiate with manufacturers, potentially through non-purchasing actions.

With the continued growth in demand for AI and high-performance computing, memory prices are on the rise. According to TrendForce, Kioxia and WDC have increased capacity utilization since Q1 2024, while others maintain low production strategies. Although NAND Flash procurement slightly decreased in the second quarter compared to the first quarter, the overall market sentiment continues to be influenced by reduced supplier inventory and production cut effects. As a result, NAND Flash contract prices for the second quarter are expected to see a strong increase of approximately 13-18%.

Apart from NAND Flash, in the realm of DRAM, although suppliers’ inventories have decreased, they have not yet returned to healthy levels. Moreover, in the context of improving losses, suppliers are increasing capacity utilization.

However, due to unfavorable overall demand prospects for 2024 and significant price hikes by suppliers since the fourth quarter of 2023, the momentum for inventory replenishment is expected to weaken gradually. Therefore, TrendForce predicts that the second-quarter contract price increase for DRAM will converge to 3% to 8%.

Despite the continuous rise in memory prices driven by applications in artificial intelligence and high-performance computing data centers, demand in the consumer market remains subdued. Manufacturers persist in strong pricing strategies, prompting backlash from module suppliers.

Additionally, it is reported that Micron is preparing to increase second-quarter quotes by over 25%, which is putting pressure on module suppliers and potentially leading to a standoff with manufacturers.

On the other hand, module suppliers are showing a lukewarm response to the price increases and are particularly hesitant to accept price increases themselves.

However, with the three major memory manufacturers facing constraints on adding new capacity in the short term, whether module suppliers will be forced to accept significant price increases remains to be seen.

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Please note that this article cites information from TechNews.

2024-02-26

[News] NAND Flash Manufacturers Kioxia and WD Reportedly Set to Resume Merger Talks in Late April

A glimmer of hope for the once-failed engagement between NAND flash memory giants Kioxia and Western Digital (WD) may emerge again. According to a report from Japanese media Asahi News, the two parties may restart merger negotiations in late April.

 It’s reported on February 23rd that Kioxia and WD are expected to resume merger talks in late April. Although their merger negotiations hit a snag last fall, both companies are facing pressure to expand their scale for survival. However, whether they can ultimately reach a merger agreement remains uncertain.

According to the report, both Kioxia and WD manufacture NAND Flash products. If they merge, their scale will rival that of the global market leader, Samsung Electronics. The Japanese government reportedly views the Kioxia/WD merger as a “symbol” of Japan-US semiconductor cooperation and has provided support. However, the merger negotiations hit an impasse last fall, reportedly due to opposition from SK Hynix, indirectly invested in Kioxia.

As per TrendForce’s  data for 3Q23, Samsung maintained its position as the top global NAND flash memory manufacturer, commanding a significant market share of 31.4%. Following closely, SK Group secured the second position with a 20.2% market share. Western Digital occupied the third position with a market share of 16.9%, while Japan’s Kioxia held a 14.5% market share.

Asahi News’ report further indicates that WD declared in October of last year that “all discussions had ended.” To avoid insider trading, as per the report cited sources, WD is expected to wait for a certain period before the negotiation can be resumed. Therefore, once this waiting period concludes, merger talks are set to resume in late April.

Per a report from Jiji Press on February 17th, regarding the merger proposal involving Kioxia and WD, Kioxia has proposed a collaboration with SK Hynix, which opposes the merger. Kioxia has reportedly approached SK Hynix and plans to utilize the jointly operated Japanese plants of Kioxia and WD to manufacture semiconductors for SK Hynix.

The report notes that SK Hynix and Kioxia are competitors in the NAND Flash industry. However, since 2018, SK Hynix has indirectly invested approximately 15% in the predecessor of Kioxia, “Toshiba Memory,” through the American investment fund Bain Capital. SK Hynix has consistently sought to strengthen its relationship with Kioxia since then.

Kioxia’s proposed acceptance of SK Hynix’s request to “strengthen the relationship” is seen as a gesture to persuade SK Hynix to agree to the merger proposal. The goal, as per the report, is to restart the stalled merger negotiations between Kioxia and WD.

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(Photo credit: Kioxia)

Please note that this article cites information from Asahi News and Jiji Press.

2024-02-02

[News] Samsung Reportedly Adjusts DRAM and NAND Flash Capacity to Boost Prices

Samsung’s latest financial report reveals that the fourth-quarter shipments of DRAM and NAND Flash in 2023 exceeded previous expectations, reflecting an improvement in market demand. Samsung will continue selectively adjusting the production capacity of specific DRAM and NAND Flash products to boost prices.

Samsung Electronics’ memory business is expected to return to profit in the first quarter of 2024, signaling a recovery in the memory industry. Commercial Times reports that due to inventory improvements, Samsung’s utilization rate of DRAM is projected to increase from 70% in the fourth quarter of 2024 to 81% in the first quarter of 2024, and further rise to 89% in the second quarter.

According to industry sources cited in the Commercial Times’ report, Samsung’s fourth-quarter shipments of DRAM and NAND Flash in 2023 exceeded previous expectations. This was primarily attributed to Samsung’s memory experiencing a smaller price increase compared to its competitors, thereby accelerating the pace of inventory clearance, particularly in the case of DRAM, where improvements were more significant.

Samsung is expected to continue selectively adjusting the production of DRAM and NAND Flash products. As the first quarter is typically a slow season for the industry, Samsung anticipates a sequential decline in DRAM and NAND Flash shipments in the first quarter of 2024. However, prices are expected to continue rising.

Due to the destocking of Samsung’s DRAM for eight to ten weeks, it is expected to return to normal level by the end of the 1st quarter of 2024. Meanwhile, NAND Flash inventory is projected to normal level within the first half of 2024.

At the same time, Samsung plans to commence production of HBM3e 24GB products in the first half of 2024, with HBM3e 36GB products slated for production in the second half of the year, with progress ahead of schedule. Additionally, the development of the next-generation HBM4 is currently underway, with samples expected to be released in 2025 and mass production in 2026.

As per sources cited by the Commercial Times, reportedly, regarding HBM3 and HBM3e, HBM3 used in AI servers is still exclusively supplied by SK Hynix, with the highest yield in backend packaging, followed by Micron. Meanwhile, the report also indicates that HBM3e is expected to begin mass production in the first quarter of 2024. Micron’s outsourcing of backend TSV and stacking to TSMC has accelerated the product’s production speed.

As for the higher-spec HBM4, TrendForce expects its potential launch in 2026. With the push for higher computational performance, HBM4 is set to expand from the current 12-layer (12hi) to 16-layer (16hi) stacks, spurring demand for new hybrid bonding techniques. HBM4 12hi products are set for a 2026 launch, with 16hi models following in 2027.

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(Photo credit: Samsung)

Please note that this article cites information from Commercial Times.

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