After several quarters of inventory depletion, the NAND market is gradually heating up, and there are concerns of a tighten supply in 2024. During an Investor Meeting held on the 7th, Phison Electronics Corporation, a supplier of NAND flash memory controllers and modules, announced that due to capacity limitations in NAND flash production, NAND supply has become constrained. When entering 4Q23, the company is already facing tighten supply for some of its products. Consequently, Phison plans to prepay its NAND flash suppliers to ensure a stable supply, as reported by CTEE.

Phison noted that its suppliers have been reducing production since the 4Q22, and it has accelerated since the 2Q23. Following three to four quarters of inventory depletion, the NAND market is gradually recovering, leading to a stabilization in NAND prices.

In fact, the strategy of module manufacturers is influenced by NAND flash suppliers. For instance, Samsung has been actively raising NAND prices. After the company initially raised NAND prices by 10% to 20% this quarter, it has decided to continue increasing prices by quarter in 2024. This strategic decision reflects Samsung’s determination to stabilize NAND prices with the aim of reversing the market’s direction in the first half of the upcoming year.

Notably, NAND chips and DRAM account for roughly half of Samsung’s memory chip sales. Simultaneously, while raising prices, Samsung continues to decrease production to control market supply, which, in turn, improves market stability and profitability.

TrendForce previously indicated that with NAND wafer prices leading the increase since August and suppliers adopting a firmer stance in negotiations, Q4 enterprise SSD contract prices are projected to rise by approximately 5~10%. On the client SSD front, as suppliers gain more bargaining power, both high-end and low-end products are expected to increase concurrently, with 4Q23 PC client SSD contract prices projected to rise by 8~13%.

TrendForce’s NAND Flash price analysis released today also highlighted that due to continuous shortages in recent wafer supply, the market has been experiencing rising prices under a shrinking volume. While spot quotations for NAND Flash packaged dies have been oscillating narrowly in quotations on account of the persistently constrained level of visibility in demand.
(Image: Samsung)

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As reported by UDN News, Samsung Electronics is making a significant move by increasing the prices of NAND Flash memory by 20% every quarter until the second quarter of 2024. This price surge exceeds industry expectations.

Within the semiconductor industry, Samsung initially raised NAND wafer prices by 10% to 20% this quarter, Pulse reported. Now, the company has decided to continue this trend by progressively increasing prices by 20% during the first and second quarters of the next year. This strategic decision reflects Samsung’s determination to stabilize NAND wafer prices with the aim of reversing the market’s direction in the first half of the upcoming year.

Based on TrendForce’s research in October, with NAND wafer prices leading the increase since August and suppliers adopting a firmer stance in negotiations, Q4 enterprise SSD contract prices are projected to rise by approximately 5~10%. Meanwhile, reduced production of mainstream processes and fewer suppliers for high-end client SSDs have endowed suppliers with better bargaining power. Consequently, both high-end and low-end products are expected to increase concurrently, with 4Q23 PC client SSD contract prices projected to rise by 8~13%.

TrendForce also reports that Q4 contract prices for mobile DRAM are poised to see an increased quarterly rise of 13–18%. But that’s not all—NAND Flash is also joining the party, with contract prices of eMMC and UFS expected to climb by approximately 10–15% in the same quarter. This quarter is set to star mobile DRAM, traditionally the underperformer in profit margins compared to its DRAM counterparts, as it takes the lead in this round of price increases.

TrendForce foresees that memory prices are expected to continue trending upward in 1Q24. The rate of increase will depend on whether suppliers maintain a conservative production strategy and whether there is enough consumer demand to bolster the market.

Samsung’s Strategy on NAND Affect the Market and Company Performance

Following the latest financial report, NAND is a staple memory chip alongside DRAM, and together they account for around half of Samsung Electronics’ memory chip sales. In conjunction with the aggressive price hikes, Samsung is also curbing production to manage market supply effectively, promoting a positive market environment, and enhancing profitability.

At a recent financial conference on October 31st, Kim Jae-jun, Vice President of Samsung Eletronics, publicly stated, “There will be selective production adjustments to normalize inventories in a short time. A supply cut will be larger for NAND flash than for DRAM.”

Financial analysts estimate that as memory production cuts take effect and prices rise, Samsung’s operations will see a significant improvement starting from the fourth quarter of this year.

NAND Industry Foresee Bright Future amid Memory Price Surge

NAND-related businesses in Taiwan are also optimistic about the industry’s future. Khein Seng Pua, CEO of Phison Electronics Corp, indicated that the adjustment of OEM customer inventories, spanning the past six to nine months, is nearly complete. Consequently, Phison has secured more design-in projects, resulting in a gradual increase in wafer demand. Furthermore, Phison’s controller IC products have advanced into a new process generation, leading to a rise in value-added custom development projects.

Simon Chen, Chairman and CEO of ADATA, anticipates a prolonged period of rising memory prices, starting from the fourth quarter of this year and continuing into the first half of the next year. This is expected to create a two-year era of prosperity in the memory market, with supply shortages predicted in the coming years.

Industry experts highlight the reinvigoration of the NAND wafer market, with customers progressively returning. Samsung, being the global memory chip leader, is spearheading the price hikes, thereby contributing to a favorable pricing trend across the overall market.
(Image: Samsung)

Explore more:

• Suppliers Scale Back Production, Q4 NAND Flash Contract Prices Projected to Climb 8~13%, Says TrendForce
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