Enterprise SSD procurement has been rising on the back of growing server shipments since 2Q21, according to TrendForce’s latest investigations. In particular, the share of 8TB products in shipments of SSDs to data centers has shown the most noticeable growth, which is expected to persist through 3Q21. However, certain SSD components and parts may be in shortage due to insufficient foundry capacity. TrendForce is therefore revising the QoQ hikes in contract prices of enterprise SSDs for 3Q21 to 10-15% from the previous projection of 5-10%.

TrendForce further indicates that the high demand for enterprise SSDs in 3Q21 is attributed to several factors. First, North American cloud service providers (hyperscalers) have pretty much completed their inventory adjustments and now continue to expand their storage capacity. Second, the flow of incoming orders to traditional server brands is getting stronger over the quarters as government agencies and SMBs increase their budgets for IT infrastructure. Third, Intel and AMD are ramping up production for server CPUs based on their respective new processor platforms. Following the adoption of new CPUs, the overall demand for enterprise SSDs has also shifted to higher-density products because clients want to upgrade their computing power and storage capacity. Specifically, demand is mainly trending toward 4/8TB SSDs since raising NAND Flash density can lower the cost of SSD deployment.

Supply leader Samsung will likely gain control over enterprise SSD pricing in the market

Regarding the supply end, Samsung has a higher flexibility in supplying SSDs compared to the other suppliers because it has a higher share of in-house components for its storage products. Therefore, in view of the possible shortage in certain SSD components, Samsung will likely be able to further expand its market share for enterprise SSDs. Furthermore, Samsung’s products are expected to account for more than 50% of enterprise SSDs (in terms of bits) shipped to data centers in North America in 3Q21. This dominance will likely further Samsung’s ability to dictate market prices going forward.

Intel, on the other hand, has been constrained in its ability to manufacture enterprise SSDs due to a shortage of PMICs. In addition, Intel has mostly been fulfilling orders for QLC products. As a result, Intel’s market share may potentially decrease in the TLC-dominant enterprise SSD sector. Regarding other suppliers including Kioxia and SK Hynix, although they have been able to raise their market shares due to gradual adoption of their products by clients, they are unlikely to catch up to Samsung for the time being.

On the PC client SSD front, at the moment, demand for notebook computers has remained strong, while the supply of SSD controller IC is still relatively tight. TrendForce therefore forecasts a slight 3-8% QoQ increase in client SSD contract prices for 3Q21. Regardless, suppliers will not slow down their process migrations. Starting from 3Q21, 176L PC client SSDs will be available on the market, with a corresponding increase in supply bits in the upstream SSD supply chain.

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With Samsung, YMTC, SK Hynix, and Intel leading the charge, NAND Flash suppliers will maintain an aggressive effort to expand their production capacities throughout 2Q21, during which NAND Flash bit output will likely increase by nearly 10% QoQ, according to TrendForce’s latest investigations. On the other hand, orders from PC OEMs and Chinese smartphone brands since 1Q21, as well as recovering procurement activities from clients in the data center segment during 2Q21, will generate upward momentum propelling NAND Flash bit demand. Furthermore, buyers are actively stocking up on finished products, such as SSDs and eMMC, due to persistently limited NAND Flash controller supply. TrendForce therefore expects NAND Flash contract prices to increase by an average of 3-8% QoQ in 2Q21 after experiencing a 5-10% decline QoQ in 1Q21. In particular, as Samsung’s Line S2 fab in Austin has yet to resume full operation after the Texas winter storm, the supply of NAND Flash controllers going forward may be at risk, and Samsung’s ability to manufacture client SSDs will be further constrained as a result. In light of these factors, TrendForce is not ruling out the possibility that NAND Flash contract prices may increase by even more than current forecasts.

Contract prices of both client SSDs and enterprise SSDs are projected to rise due to delayed resumption at Samsung’s Line S2 fab

With regards to client SSDs, the persistent stay-at-home economy generated by the COVID-19 pandemic will likely result in strong demand for notebook computers in 2H21, while PC OEMs have raised their client SSD inventories as they manufacture more notebooks to meet demand. Given the high volumes of client SSD orders from PC OEMs, inventory level of NAND Flash suppliers is therefore likely to remain healthy. However, the shortage of NAND Flash controllers has yet to be resolved. Suspended operations at the Line S2 fab disrupted Samsung’s production of NAND Flash controllers, meaning some client SSD orders will not be fulfilled in 2Q21. Hence, the tight supply of finished products (i.e., client SSDs) will be further exacerbated. As such, client SSD contract prices are projected to increase by 3-8% in 2Q21.

With regards to enterprise SSDs, demand is expected to rebound from rock bottom in 2Q21, primarily because clients in the data center segment will ramp up their procurement activities after undergoing a period of inventory adjustment. In addition, demand for IT equipment from the governmental, healthcare, and financial services sectors will also gradually emerge. Other factors contributing to enterprise SSD demand include bids from Chinese telecom operators and increased IT equipment purchases from small and medium businesses globally. On the other hand, NAND Flash suppliers are no longer under pressure to destock via low prices, since their inventory levels have improved thanks to high demand from notebook manufacturers and smartphone brands. As the overall demand for NAND Flash rises, enterprise SSD contract prices are in turn expected to stabilize and experience a 0-5% growth QoQ in 2Q21.

High demand for Chromebooks will provide upward momentum for eMMC quotes, while contract prices of UFS are projected to undergo the lowest growths among NAND Flash products

eMMC contract prices will likely remain, for the most part, higher than expected despite the cyclical downturn in 1H21. In particular, strong demand from Chromebook manufacturers will provide upward momentum for eMMC quotes. Likewise, under the influence of NAND Flash controller shortage, eMMC buyers such as consumer electronics manufacturers will expand their procurement activities in order to build up their inventories. As a result, the overall eMMC demand will gradually ramp up in 2Q21. Conversely, the supply of eMMC controllers is still in shortage due to the fully loaded capacities across the foundry industry. Also, eMMC products under 32GB exclusively feature 2D NAND or 64L 3D NAND. Because production capacities allocated for these types of NAND Flash memories have been either reassigned to other 3D NAND products or scaled down, the oversupply of eMMC has been alleviated, and the long-term price drop of eMMC has subsequently come to a halt. In the short term, the shortage of controller ICs will result in a shortage of finished eMMC products. eMMC contract prices are therefore projected to increase by 3-8% QoQ in 2Q21.

Demand for UFS, which is primarily used for smartphones, is expected to remain high through 2Q21 because OPPO, Vivo, and Xiaomi have been aggressively procuring UFS since 4Q20, and Huawei spun off its Honor smartphone business unit. Buyers have also been anticipating an upcoming shortage of controller ICs and NAND Flash memory, leading them to build up their UFS inventories and therefore further driving up the overall UFS demand. On the supply side, inventory levels of suppliers have dropped significantly due to smartphone brands’ large-scale procurement activities previously. Although Chinese smartphone brands have yet to ramp up their bit demand, their existing level of demand still remains strong. Furthermore, clients from the data center segment are expected to increase their SSD procurement in 2Q21, and suppliers will maintain an aggressive approach regarding quotes in response. Even so, because smartphones account for the highest bit consumption share among all NAND Flash applications, NAND Flash suppliers are unlikely to significantly adjust their UFS quotes. As such, UFS contract prices are expected to increase by 0-5% QoQ in 2Q21, which is relatively lower compared to other NAND Flash products.

NAND Flash wafer contract prices are projected to increase by 5-10% QoQ as NAND Flash suppliers lower their bit shipment to the wafer market due to its lower profit margins

With regards to the NAND Flash wafer market, TrendForce has yet to observe an obvious improvement in the retail sales of end products such as SSDs, memory cards, and USB flash drives. However, as NAND Flash suppliers have been unable to make their scheduled delivery dates to OEMs due to an insufficient supply of controller ICs, module makers may stand to benefit from this and obtain more orders from OEMs, subsequently driving up the demand for NAND Flash wafers within the next one to two quarters, but the actual procurement of NAND Flash wafers will depend on whether the tight supply situation of controller ICs can be alleviated. On the other hand, inventories of NAND Flash suppliers have now fallen to mostly healthy levels thanks to procurement activities from smartphone brands since 4Q20. Suppliers have accordingly lowered their bit shipments to the NAND Flash wafer market (which yields a relatively lower profit margin compared to other product categories), due to the rising demand from notebook manufacturers and the expected recovery of the data center segment in 2Q21. On the whole, given the bullish market of mainstream products, such as smartphones and notebooks, TrendForce expects NAND Flash wafer contract prices to once again increase by 5-10% QoQ in 2Q21.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

As the three dominant DRAM suppliers (Samsung, SK Hynix, and Micron) are currently experiencing a shortage in their production capacities, the corresponding shortage situation in the DRAM market has yet to be resolved, according to TrendForce’s latest investigations. Taking advantage of the fact that the whole DRAM market has entered a period of cyclical upturn in 1Q21, DRAM suppliers have significantly raised quotes for specialty DRAM products. This extraordinary development has led to price hikes that are almost double digits for some specialty DRAM chips. Furthermore, the magnitude of the price hike especially widens for products belonging to the lower part of the density range and the more niche applications. Looking at MoM changes in contract prices of specialty DRAM products for February, DDR2 and DDR3 chips saw the largest price hikes. Prices of DDR4 chips also went up due to the influence of the rising quotes for DDR3 chips. The average contract price of DDR3 4Gb chips, which are still mainstream for specialty applications, jumped 6.8% MoM.

As for DDR3 2Gb chips that are primarily promoted by Taiwan-based suppliers, TrendForce indicates that there is not enough supply even as quotes are being offered. With this situation becoming the norm, the price range (i.e., the difference between the high and low prices) has also expanded dramatically. The average contract price of DDR3 2Gb chips rose by nearly 9% MoM in February. Samsung significantly raised quotes for DDR4 4Gb chips in response to the sharp upswing in prices of DDR3 chips. The low and average prices of DDR4 4Gb chips for specialty applications both climbed around 6% MoM. The average price of DDR4 8Gb chips went up by around 4% MoM as the price trend of this product aligns with the general price trends of mainstream PC DRAM and server DRAM products. However, it should be pointed out that the hikes in contract prices of specialty DRAM chips were mainly the result of the adjustments made to monthly contract deals and thus reflected the market situation of February. By contrast, prices held steady for quarterly lock-in deals with tier-1 clients.

While the three dominant DRAM suppliers have been slowing down their DDR3 manufacturing, Taiwanese suppliers are constantly adjusting their capacity allocation to maximize profits

With demand getting hotter in the specialty DRAM market, DDR3 products are starting to surpass DDR4 products and logic ICs in profit margin. Consequently, DRAM suppliers are also changing their strategies. Looking at South Korean suppliers, Samsung will continue shifting the wafer production capacity of Line 13 to CMOS image sensors over the long term. However, this reassignment has now been scaled down for this year due to the recent surge in specialty DRAM prices. Likewise, SK Hynix will keep the DRAM production capacity of its older fab M10 relatively constant through 2021 after reducing it in 2020. As for Micron, it has raised the yield rates of the 1Z-nm and 1-alpha processes, so the output shares of products based on these more advanced technologies will gradually expand. Since the available fab space in Taiwan is limited, Micron will relocate the 20nm and more mature processes to Fab 6 in the US. In sum, the output of DDR3 products from the three dominant suppliers will continue to shrink, but the pace of the reduction is now slower than originally expected.

Regarding Taiwan-based suppliers, Nanya has shifted some 20nm and 30nm production capacity from DDR4 products back to DDR3 products. Winbond has been focusing on Flash products in the recent years, and its DRAM production capacity will remain fairly limited until the completion of its new fab in Kaohsiung. Nevertheless, Winbond is concentrating its DRAM production efforts on low-density DDR2 and DDR3 products (i.e., 1Gb and 2Gb chips). It actually has the advantage of being able to raise prices as its market share for low-density products is fairly large. As for PSMC, it has been focusing on foundry manufacturing of logic ICs for a while. However, with prices now rising for foundry manufacturing of DDR3 products, PSMC now wants to shift some wafer production capacity back to DRAM. Going forward, the three Taiwan-based suppliers will keep adjusting their capacity allocation strategies in accordance with changes in the profit margins of different products. Nevertheless, even as suppliers are now changing their product mixes to take advantage of the latest market situation, TrendForce projects that specialty DRAM products will be in undersupply at least through 1H21. The magnitudes of price hikes for various types of specialty DRAM products will depend on suppliers’ capacity allocation strategies.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

Global DRAM revenue reached US$17.65 billion, a 1.1% increase YoY, in 4Q20, according to TrendForce’s latest investigations. For the most part, this growth took place because Chinese smartphone brands, including Oppo, Vivo, and Xiaomi, expanded their procurement activities for components in order to seize the market shares made available after Huawei was added to the Entity List by the U.S. Department of Commerce. These procurement activities in turn provided upward momentum for DRAM suppliers’ bit shipment. However, clients in the server segment were still in the middle of inventory adjustments during this period, thereby placing downward pressure on DRAM prices. As a result, revenues of most DRAM suppliers, except for Micron, remained somewhat unchanged in 4Q20 compared to 3Q20. Micron underwent a noticeable QoQ decline in 4Q20 (which Micron counts as its fiscal 1Q21), since Micron had fewer work weeks during this period compared to the previous quarter.

Demand for PC, mobile, graphics, and consumer DRAM remains stable throughout 1Q21. As for clients in the server segment, they have now reinitiated a new round of procurement for server DRAM after adjusting their inventories during the two previous quarters (3Q20 and 4Q20). These aforementioned factors, in addition to Micron’s power outage at the start of December last year, resulted in a price hike across all DRAM product categories in 1Q21. TrendForce expects DRAM bit supply to remain unchanged and prices to enter an upturn compared with 4Q20. However, as 1Q21 is the first quarter of the upturn in the DRAM market, and demand is yet to emerge out of the off-season, any growth in bit shipment and prices is expected to be modest, with only a slight QoQ increase in global DRAM revenue compared to 4Q20.

Suppliers’ profits were constrained by persistent declines in DRAM prices in 4Q20

With regards to revenue, the performances of Korean DRAM suppliers and that of Micron once again diverged from each other in 4Q20. This difference can mostly be attributed to the fact that, as previously mentioned, Micron had 13 work weeks in 4Q20 (which it refers to as its fiscal 1Q21) compared to the previous quarter, which contained 14 work weeks and therefore was a higher base for QoQ comparison. As such, Micron’s 4Q20 DRAM bit shipment and ASP both fell short of 3Q20 figures. Conversely, although Korean suppliers likewise experienced a QoQ decline in DRAM ASP, they were able to increase their bit shipment, indicating that their client demand was recovering during this period. Samsung and SK Hynix both increased their bit shipment by a wider margin than previously expected. This was enough to offset the downward pressure on revenue caused by the decline in the two companies’ DRAM quotes. In 4Q20, Samsung and SK Hynix each recorded a 3.1% and 5.6% QoQ increase in revenue, while Micron’s revenue declined by 7.2% due to the corresponding decline in its quarterly bit shipment. Micron’s market share also subsequently fell to 23% in 4Q20. Moving to 1Q21, however, Micron is likely to catch up to its Korean competitors in terms of market share, owing to Micron’s pricing strategies, which are the most aggressive among DRAM suppliers, as well as to a general upturn in DRAM quotes.

With regards to profits, all suppliers experienced a decline in 4Q20 as a result of the 5-10% QoQ decline in DRAM ASP. In particular, Samsung’s operating profit margin fell from 41% in 3Q20 to 36% in 4Q20, while SK Hynix likewise showed a decline from 29% in 3Q20 to 26% in 4Q20. For the September-November fiscal quarter (Micron’s own fiscal 1Q21), Micron posted a similar decline in DRAM ASP compared to that of its Korean competitors, as well as a decline in operating profit margin from 25% in 3Q20 to 21% in 4Q20. Taken as a whole, DRAM suppliers were unable to make up for the drop in DRAM quotes with cost-optimization measures. Looking ahead to 1Q21, on the other hand, TrendForce expects DRAM quotes to rebound from rock bottom, in turn generating some upward momentum for suppliers’ profitability to rebound from rock bottom as well. These events will officially mark the cyclical upturn in DRAM prices. It should also be pointed out that, for instance, leading supplier Samsung still retains at least a 30% profit margin even at the lowest level of quotes, while this figure is closer to 10% for Nanya Tech, which is comparatively smaller in scale as a company. These margins suggest that the DRAM industry will be able to maintain its profitability due to its oligopolistic nature, at least prior to the entrance of emergent suppliers from China.

With regards to Taiwanese suppliers, Nanya Tech also increased its bit shipment while its quotes fell compared to 3Q20, resulting in a slight QoQ decline of 0.7% in revenue in 4Q20. Along with falling quotes, Nanya Tech’s operating profit margins narrowed from 13.5% in 3Q20 to 8.8% in 4Q20. As for Winbond, NOR Flash products accounted for an increasing percentage of its total revenue, mostly at the expense of its NAND Flash business, in 4Q20. However, its DRAM revenue underwent a slight QoQ growth of 0.8% during this period due to an early upturn of the specialty DRAM market. This growth was relatively limited due to Winbond’s limited DRAM bit supply rather than low client demand. PSMC’s DRAM revenue includes only its in-house PC DRAM products. The company’s DRAM revenue declined by about 1.7% QoQ in 4Q20 because its production capacity for DRAM was crowded out by other logic ICs in relatively high demand, including PMICs (power management IC), driver ICs, and CIS.

TrendForce indicates that, going forward, the three Taiwanese suppliers are still placing a heavy emphasis on their strongest products while furthering their own respective competitive advantages in the industry. For instance, Nanya Tech has been actively developing its 1A/1Bnm process technologies, with the goal of submitting samples to its partners by the end of 2021. Winbond, on the other hand, is continuing to improve the yield rate of its new 25nm DRAM process technology and expand its production capacity to meet the high demand for NOR Flash memories. Finally, PSMC will continue to maintain fully loaded wafer capacity for logic ICs, which are products with relatively higher gross margins, given the high demand for such products at the moment.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

The quarterly total revenue of the NAND Flash industry came to US$14.1 billion in 4Q20, showing a QoQ drop of 2.9%, according to TrendForce’s latest investigations. The total bit shipments of the NAND Flash industry in 4Q20 registered a QoQ increase of nearly 9%. This gain for the most part offset the negative impacts brought about by the QoQ decline of nearly 9% in the overall ASP of NAND Flash products, as well as by the unfavorable exchange rates that impaired some suppliers’ performances. At the same time, clients in the server and data center segments continued their inventory reduction efforts that had begun in 3Q20. Since their procurement drive remained fairly weak, contract prices of NAND Flash products continued their decline as well. However, NAND Flash suppliers were receiving substantial orders from OPPO, Vivo, and Xiaomi. On the whole, the strong demand in the smartphone segment mostly compensated for the weak demand in the server and data center segments. In the notebook computer segment, Chromebook devices were the primary sales driver, but the storage components of most Chromebooks are low-density solutions, meaning related NAND Flash demand is somewhat limited.

Turning to 1Q21 (this quarter), the bit output of the NAND Flash industry continues to grow significantly due to two factors. First, Samsung and YMTC are actively expanding production capacity. Second, all suppliers are eager to migrate to the more advanced stacking process. On the demand side, PC and smartphone brands have kept stocking up on components. However, they have also slightly corrected down their demand as the first quarter is the traditional off-season. As for clients in the server and data center segments, they have yet to restart large-scale procurement even though their inventories have generally returned to a healthy level. As such, during price negotiations, NAND Flash suppliers still expect the oversupply situation in the market to intensify and thereby further drive contract prices of NAND Flash products downward. Therefore, NAND Flash suppliers’ revenues are projected to undergo a QoQ decline in 1Q21.

Samsung

Two factors helped Samsung’s performance in the NAND Flash market during 4Q20. First, Chinese smartphone brands (with the exception of Huawei) continued to aggressively build up their component inventories so as to fight for more market share. Second, PC OEMs released more upside orders than anticipated because of the further demand growth for notebook computers. Samsung’s NAND Flash bit shipments in 4Q20 rose by 7-9% QoQ as a result of the strong procurement momentum in the smartphone and PC segments. However, the ASP of its NAND Flash products dropped by more than 10% QoQ for the same period. Although clients in the data center segment did begin sending out orders for servers and components at that time, their demand was still very limited. As for clients in the enterprise server segment, they were mainly focused on inventory reduction. With the market leaning toward oversupply, Samsung had to lower prices and thereby experienced a revenue decline. Compared with 3Q20, Samsung’s NAND Flash revenue fell by 3.4% to US$4.644 billion.

Regarding production and technology plans, Samsung this year will be the leader among NAND Flash suppliers in raising production capacity. Besides continuing to expand the production capacity of the Xi’an Fab 2, Samsung will also set up a production line for 3D NAND Flash at P2L (in the Pyeongtaek campus). Most of Samsung’s NAND Flash products are still based on the V5 (92L) process at this moment. However, the supplier will significantly raise the output share of NAND Flash from the V6 (128L) process this year. The application of the V6 process technology will expand to more of its offerings for SSDs and UFS solutions.

Kioxia

Following the end of Huawei’s stock-up activities, Kioxia was unable to fully regain the demand for its mobile NAND Flash products through orders from other Chinese smartphone brands in 4Q20. At the same time, the supplier was affected by the weak demand for enterprise SSDs. On the other hand, there were other sources of demand such as notebook computers and game consoles. Consequently, Kioxia’s bit shipments in 4Q20 still registered a small increase. As for the ASP, Kioxia experienced a QoQ decline of 8-10% because of the general oversupply situation. On account of these factors, Kioxia’s NAND Flash revenue slid by 11.4% QoQ to US$2.749 billion for 4Q20.

Regarding production and technology plans, Kioxia will gradually expand the production capacity of K1. As for the construction of new fabs, Kioxia is staying with its plan to begin building Fab 7 in Yokkaichi and K2 in Kitakami in 1Q21. These fabs, which will be producing BiCS6 or more technologically advanced products, are expected to start contributing to the supplier’s output sometime in 2022. Technology migration will also be the main driver of its bit output growth. Currently, the majority of Kioxia’s NAND Flash products are still manufactured with the 96L BiCS4 process. Going forward, the supplier intends to raise the shipment share of 112L BiCS5 products this year.

Western Digital

Western Digital saw the ASP of its NAND Flash products drop by 9% QoQ for 4Q20 as its clients in the server segment were reducing their inventories. On the other hand, the sales of its channel-market products continued to grow, and the robust demand for notebook computers led to an impressive shipment result for its client SSDs. Western Digital’s bit shipments in 4Q20 increased by 7% QoQ. This roughly compensated for the decline in the ASP. All in all, the supplier posted a QoQ drop of just 2.1% in its revenue to US$2.034 billion.

Concerning its activities, Western Digital will be collaborating with Kioxia in the construction of Fab 7 and K2. The additional production capacity from these two plants will help the allied suppliers to deal with market competition in the future. The 96L BiCS4 process will be Western Digital’s primary technology for NAND Flash production this year. Additionally, Western Digital will be providing OEMs with samples of TLC and QLC products that are manufactured with the 112L BiCS5 process sometime between 2Q21 and 3Q21. Western Digital’s next-generation BiCS6 process is also set to enter the production stage in 2022.

SK Hynix

SK Hynix benefited from the aggressive stock-up activities of Chinese smartphone brands in 4Q20. Its bit shipments rose by 8% QoQ, but its ASP also dropped by 8% QoQ due to the general oversupply situation. With the decline in the ASP being canceled out by the increase in bit shipments, SK Hynix kept its NAND Flash revenue relatively constant for 4Q20. It posted a miniscule QoQ decline of 0.2% to US$1.639 billion.

This year, SK Hynix will rely on technology migration as the primary means of increasing bit output. The share of 128L products in its bit output came to around 30% at the end of 2020 and is expected to keep growing to surpass the output shares of 72L and 96L products in 2021. The supplier has also scheduled the launch of its 176L products for 2H21. Regarding the acquisition of Intel’s NAND Flash plant in Dalian, the transfer of the ownership of the plant along with Intel’s SSD assets is expected to be completed by the end of this year as originally planned.

Micron

Thanks to stock-up activities of smartphone brands and the growing demand for QLC SSDs from PC OEMs, Micron posted a significant QoQ increase of 17-20% in its bit shipments for 4Q20. However, like other suppliers, its ASP fell in the same period due to the general oversupply situation and registered a QoQ decline of 10-13%. In terms of revenue, Micron posted a QoQ increase of 2.9% to US$1.574 billion.

On the technology front, Micron has 128L products, but unlike other suppliers’ strategies, Micron will not ship 128L products to its main clients. Instead, Micron is focusing on the development of the second-generation 176L products that will serve as its main offerings in the future. Its clients will thus bypass the 128L process and advance directly to 176L process. OEMs are expected to begin receiving samples of 176L products from Micron in 2Q21 in accordance with the supplier’s schedule. With respect to the cell type, Micron is raising the shipment share of QLC products. Currently, more than 50% of supplier’s NVMe SSD shipments (in bit terms) are QLC products.

Intel

Intel made a recovery in its bit shipments in 4Q20 after inventory adjustments in the data center and enterprise server segments had caused a QoQ decline of nearly 25% in 3Q20. The procurement momentum of its clients was still fairly weak in 4Q20, but it did pick up somewhat compared with the previous quarter. Additionally, the demand from PC OEMs continued to rise. Consequently, Intel’s bit shipments grew by nearly 25% QoQ for 4Q20. Again like other suppliers, Intel saw its ASP drop in 4Q20 because of the general oversupply situation. The QoQ decline came to almost 20%. On balance, Intel’s NAND Flash revenue went up by 4.8% to US$1.208 billion for 4Q20.

Intel will probably not make any significant changes to its existing plans for production capacity and product mix as it has sealed the deal to sell its NAND Flash business to SK Hynix. It will continue to leverage its advantage in the enterprise SSD market to push its clients to adopt 144L products. Regarding the distribution of its product shipments by technology, Intel will be raising shipment share for the 144L stacking process and the QLC architecture. To increase the output of 144L products, Intel will expand the production capacity of the Dalian plant this year. From a long-term perspective, SK Hynix will be the main beneficiary of this capacity expansion effort.

On the whole, TrendForce’s investigations find that PC OEMs have been releasing a substantial amount of upside orders since the start of 1Q21. Although the oversupply situation is worse compared with 4Q20, it has become more moderate than expected. Moreover, the market is anticipating that clients in the data center segment will reinitiate large-scale procurement in 2Q21. The sentiment has thus turned more positive with respect to contract negotiations, and the general price decline has also begun to ease earlier than expected. Suppliers’ sales performances are projected to rebound rapidly in 2Q21.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com