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TrendForce Anticipates Oversupply in NAND Flash Market to Be Corrected in Q3 as OEM Demands Gradually Rises

The NAND flash market is picking up thanks to the launching of new models in the smartphone market and the stock-up demand for upcoming iPhone, according to the latest report from DRAMeXchange, a division of TrendForce. The global research institution also estimates that the excess supply of NAND flash will be corrected in the third quarter. 

From the supply side, most memory makers have successively announced their schedules for mass producing 3D-NAND flash. However, the integration of controller chip and system compatibility still need to be taken into account before 3D-NAND flash becomes widely available for embedded system application. Based on DRAMeXchange’s current projection, 3D-NAND flash will make up just 7% of NAND flash’s average annual output for 2015. Additionally, some vendors are having unexpected slowdown in their migrations of eMMC and SSD productions onto the 15/16nm processes. The introduction of TLC-based solutions to different applications is also having some delays. Consequently, the supply bit growths for the second and third quarter will be lower than anticipated. 

DRAMeXchange’s Vice President Sean Yang stated the key factor to the turnaround in the NAND flash market is the rising demands. From the first quarter to the initial half of the second quarter, the smartphone market was weak due to seasonality and sagging domestic demand in China. This in turn negatively affected the NAND flash market as well. “The situation will start to change now with the successive releases of new models by the global smartphone vendors,” said Yang. “Memory makers are also shifting their capacities to meet the particularly huge demand from Apple since iPhone and iPad both carry a lot of NAND flash.” 

Yang also noted that China-based smartphone vendors are beginning to get ready for the third quarter’s peak season and the launch of the new mobile processor platform. Thus, the demand bit growth in the second and third quarter will outstrip supply, and the price of NAND flash will gradually stabilize.

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