Overall, while enterprise SSD contract prices continued their downward trajectory in Q3, a surge in global purchasing demand by 10% has elevated its revenue to US$1.56 billion, marking a 4.2% QoQ increase.
TrendForce reports a pivotal shift in the NAND Flash market for 3Q23, primarily driven by Samsung’s strategic decision to reduce production. Initially, the market was clouded by uncertainty regarding end-user demand and fears of a subdued peak season, prompting buyers to adopt a conservative approach with low inventory and slow procurement.
TrendForce has issued its latest findings, indicating that the global SSD market has rectified its supply and demand dynamics in 2022, following a resolution in the shortage of master control ICs that had hampered the market in 2021. Despite the normalization of supply, global SSD shipments witnessed a decline, with only 114 million units shipped in 2022—a 10.7% decrease from the prior year.
TrendForce research indicates a significant rise in NAND Flash contract prices in the fourth quarter, with an anticipated hike of approximately 8~13%. This increase has been largely attributed to stringent production controls exercised by suppliers.
According to TrendForce's research, other suppliers are also expected to follow suit and increase their production cutbacks in the fourth quarter to accelerate inventory reduction. With this maneuver in play, Q4 NAND Flash average prices are projected to either hold firm or witness a mild surge, possibly in the ballpark of 0~5%.
TrendForce research reveals that, due to the impacts of high inflation and economic downturn, CSPs are adopting more conservative strategies when it comes to capital expenditure and consistently reducing their annual server demand forecasts. Consequently, global enterprise SSD revenue hit an all-time low in the second quarter, totaling just $1,500 million—a QoQ decrease of 24.9%.
TrendForce expects that memory suppliers will continue their strategy of scaling back production of both DRAM and NAND Flash in 2024, with the cutback being particularly pronounced in the financially struggling NAND Flash sector. Market demand visibility for consumer electronic is projected to remain uncertain in 1H24.
TrendForce predicts that NAND Flash wafers will be the first to see a price hike in 3Q23 as prices for module products such as SSDs, eMMCs, and UFS will likely continue to fall due to tepid downstream demand. Consequently, the overall ASP of NAND Flash is forecast to continue dropping by about 3~8% in 3Q23, though a possibility exists prices may recover in 4Q23.
This resulted in a significant 47.3% decline in Q1 revenue, reducing it to US$1.998 billion. However, after the Q1 inventory liquidation, there’s been a projected slight uptick in purchasing demand for server ODM orders in Q2. Consequently, enterprise SSD suppliers’ revenue is anticipated to revert to a growth trajectory in the second quarter.