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Press Releases
NAND Flash Market Will See Falling Quotes and 0-5% QoQ Declines in Contract Prices for 4Q21, Says TrendForce

2021/09/23

Semiconductors

The latest analysis of the NAND Flash market from TrendForce finds that shipments have been below expectations for consumer electronics such as smartphones, Chromebooks, and TVs during this second half of the year At the same time, demand remains sluggish for retail storage products including memory cards and USB drives Data centers and enterprise servers represent the only applications that show relatively strong demand With the inventory level of the demand side steadily rising, the procurement momentum of NAND Flash buyers will become more constrained going forward The gradual weakening of demand is also relieving the shortage of NAND Flash controller ICs Taking account of these factors, TrendForce forecasts that quotes for NAND Flash products will begin to fall in 4Q21, and NAND Flash contract prices will register QoQ declines of 0-5% for that period For 4Q21, Contract Prices of Client SSDs Will Drop by 3-8% QoQ, Whereas Contract Prices of Enterprise SSDs Will Rise Slightly by 0-5% QoQ Countries in North America and Europe are gradually lifting COVID-19 restrictions as their vaccination rates rise Consequently, schools and businesses in those countries have also reopened and resumed normal operation Due to this development, the demand for Chromebooks, which are mainly purchased by academic institutions, has started to slide rapidly The demand for consumer notebook (laptop) computers has slowed down as well Among different types of notebook computers, only commercial models continue to experience growing demand On the side of device manufacturers, the shortages of other types of non-memory ICs are disrupting the operations of ODMs In particular, the prolonged nationwide lockdown in Malaysia has aggravated the undersupply situation for PMICs This problem not only impacts the production of PCs and notebook computers but also affects the product assembly capacity of some SSD suppliers Additionally, NAND Flash suppliers are rapidly raising production capacity for NAND Flash products that are 128 or higher in layer count As a result, supply is gradually outpacing demand for SSDs TrendForce believes that suppliers will become increasingly proactive in pricing in order to raise the consumption of their production output by customers and thus prevent excess inventory Hence, contract prices of client SSDs are forecasted to make a downward turn in 4Q21 and register QoQ declines of 3-8% Regarding enterprise SSDs, customers in the data center segment have raised the volumes of their orders for two quarters straight, and their inventories have been climbing steadily as well Therefore, the demand for enterprise SSDs will start to weaken in 4Q21 The procurement of enterprise SSDs by server OEMs will continue to be sustained by server shipments to medium and small enterprises in 4Q21 However, the total server shipments for the same period will be impacted by the ongoing IC shortage Server shipments are forecasted to drop by nearly 9% QoQ for 4Q21, and the demand bits related to enterprise SSDs will also fall by 7% QoQ for the same period Turning to the supply side of the enterprise SSD market, lead time has been prolonged for the enterprise SSD controller ICs from Intel because Intel’s main base for packaging and testing this kind of chip is located in Malaysia, which is now a COVID-19 hotspot The situation is not expected to improve in 4Q21, so bit shipments of enterprise SSDs from Intel will shrink from 3Q21 Since Intel’s market share for enterprise SSDs is fairly large, the effect of the recent COVID-19 outbreaks in Malaysia on contract prices of enterprise SSDs will be significant TrendForce currently forecasts that contract prices of enterprise SSDs will rise by 0-5% QoQ for 4Q21 The hike will be mainly caused by the lack of components on the supply side rather than an increase in demand 5-10% Reduction Projected for eMMC Prices amidst Significant Drop of End Demand The demand for major consumer products, such as TVs and tablets, has started to weaken after the conclusion of the traditional peak season of stocking, as well as the gradual withdrawal of subsidization policy from the US The continuous elevation of the vaccination rate in European and American countries, followed by a progressive mitigation of lockdown measures in various countries and successive resumption of school operations, have yielded an apparent impact to the demand for notebooks and tablets related to education purposes, while the aggravated stocking from the buyers during 1H21 in fear of shortages in NAND Flash controller IC has increased the inventory level and further suppressed eMMC orders Despite stable capacity for low density 2D MLC NAND, as well as confined supply of NAND Flash controller due to the full load capacity of 28/40nm processes from foundries, the prices have been deprived of support owing to the sizable depletion in end demand, where a prominent decrement of 5-10% is expected for relevant products during 4Q21 after the substantial increase in 2Q21 0-5% Reduction Projected for UFS Prices amidst Enhanced Supply and Diminished Demand TrendForce has downward revised the projections to the annual production of smartphones under the fluctuating COVID-19 pandemic status in Southeast Asia In addition, the stocking demand for new iPhones and flagships of various brands will gradually decelerate upon entering 4Q21, while the peak season of stocking is soon to be transitioned to the imminent off season Purchase dynamics of UFS are expected to further subside Regarding supply, mobile clients are currently using similar layers in products to that of PC OEMs after the spontaneous incorporation of 1xxL by different brands during 1Q21, and the provision of products with higher layers is expected to amplify under PC products’ expansion of market satisfaction and the unmitigated component gaps of ODMs UFS quotations are estimated to deteriorate by 0-5% in 4Q21 under enhanced supply and diminished demand NAND Flash Wafer Prices to Sustain the Largest Quarterly Decrease of 10-15% amidst Subsided Demand for Major Applications The demand performance for retail end products has been sluggish since the beginning of 2021 aside from the temporal nourishment from the related demand for a storage-based cryptocurrency (Chia) between April and May Memory cards and USB flash drives have been sluggish in sales since 2Q21 due to the successive exacerbation of the pandemic status in India and Southeast Asia, and the sales of retail SSD from channels have been impeded owing to the shortages of graphics cards, which obstructs the bundling with assembled computers The fluctuation of cryptocurrency prices, for which the plummeting had slightly improved the shortages of graphics cards at one time, has triggered another recovery in the demand for mining, and further inhibits the sales volume of SSD It is worth noting that the diverted tendency between end products and upstream components has manifested considerable pressure to module houses Pressure from the sales of NAND Flash wafer inventory is expected to gradually magnify for suppliers under the worse-than-expected demand for products such as notebooks, smartphones, and TVs Few suppliers have signaled their willingness in active provision during 4Q21, though the continuously enlarging void of PMIC has instead entangled the shipment of finished enterprise SSD, which intensifies the sales pressure of NAND Flash wafer Furthermore, YMTC, WDC, and Micron have initiated an active supply of 128, 112, and 176L product samples to module houses for testing and incorporation The incorporation of higher layers will further refine shipment cost that will obtain additional room in price reduction for suppliers 3D NAND wafer is expected to sustain the largest depletion among all product categories at 10-15% during 4Q21 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@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/

Press Releases
NAND Flash Revenue for 2Q21 Rises by 10.8% QoQ Due to Strong Notebook Demand and Procurements for Data Centers, Says TrendForce

2021/08/26

Semiconductors

NAND Flash suppliers’ Clients in the data center segment were gradually stepping up enterprise SSD procurement after finishing inventory adjustments, according to TrendForce’s latest investigations Moreover, the adoption rate of 4/8TB products in the enterprise SSD market increased substantially on account of the releases and adoption of the new server processor platforms from Intel and AMD Although the recent wave of COVID-19 outbreaks that struck Southeast Asia weakened smartphone sales in 2Q21, the quarterly total NAND Flash bit shipments rose by nearly 9% QoQ, as PC OEMs still had plenty of component orders in 2Q21 due to the fairly robust notebook demand during the period On the other hand, the shortage of controller ICs became more severe during the period, and the winter storm that battered Texas this February affected the operation of Samsung’s foundry fab Line S2 in Austin As demand for NAND Flash products rose, the overall ASP also rose by nearly 7% QoQ, and the quarterly total NAND Flash revenue rose by 108% QoQ to US$164 billion in 2Q21 Moving into 3Q21, clients in the data center segment will gradually become the main growth driver as they expand procurement of high-density enterprise SSDs Furthermore, notebook demand is expected to remain at a fairly high level in 3Q21, thereby sustaining NAND Flash demand bit growth and the ongoing rise in contract prices of NAND Flash products Hence, TrendForce currently forecasts that the quarterly total NAND Flash revenue will not only again register a QoQ increase but also hit a record high for 3Q21 Samsung For 2Q21, Samsung’s bit shipments grew by around 8% QoQ thanks to the strong demand from PC OEMs and hyperscalers aggressively building up their enterprise SSD inventories The energetic stock-up activities and the shortage of controller ICs also caused Samsung’s ASP to rise by about 5% QoQ As a result, Samsung’s NAND Flash revenue went up by 125% QoQ to US$559 billion in 2Q21 SK hynix Smartphone storage solutions account for the largest portion of SK hynix’s sales mix Nevertheless, SK hynix’s sales performance during 2Q21 still benefitted from hyperscalers’ rising demand and the brisk flow of orders related to notebooks Hence, SK hynix grew its bit shipments by 3% QoQ Its ASP also rose by about 8% QoQ because of the general tightening of NAND Flash supply and the shortage of controller ICs All in all, SK hynix’s NAND Flash revenue went up by 108% QoQ to US$2025 billion for 2Q21 Kioxia Kioxia benefitted from strong notebook demand and resurging procurement activities from its enterprise clients in 2Q21 In addition, Kioxia’s major clients in the smartphone segment once again kicked off their NAND Flash procurement during the quarter As a result, Kioxia’s bit shipment grew by about 7% QoQ in 2Q21, while its ASP entered an upward trajectory for the first time in four quarters with a QoQ growth of more than 10% However, in light of the trailing performance of its SSSTC subsidiary (formerly Liteon’s SSD business) as well as the impact of unfavorable exchange rates, Kioxia’s revenue for 2Q21, when converted into USD, reached a mere US$3011 billion, an 85% QoQ increase Western Digital (WDC) Western Digital put up a remarkable revenue performance for 2Q21 thanks to robust demand from the notebook segment, an upswing in enterprise SSD demand, and the shipment of its second-gen NVMe enterprise SSD, which resulted in a 39% QoQ increase in Western Digital’s enterprise SSD revenue On the other hand, while products related to Chia cryptocurrency mining gained significant media spotlight at the end of April, they made limited contributions to Western Digital’s quarterly bit shipment, which underwent a mere 4% QoQ increase in 2Q21, though its ASP increased by 7% QoQ All in all, Western Digital’s NAND Flash revenue reached US$2419 billion, an 112% QoQ increase, in 2Q21 Micron Owing to strong demand from the data center and notebook segments, Micron grew its quarterly bit shipment by nearly 7% in 2Q21 In particular, Micron’s QLC client SSDs enjoyed a growing penetration rate in the PC segment With the shortage in the SSD market leading to a 3% QoQ increase in Micron’s ASP for 2Q21, its NAND Flash revenue reached US$1812 billion, a 98% QoQ increase Intel Intel’s quarterly bit shipment for 2Q21 underwent a near 10% QoQ decline in spite of strong enterprise SSD demand from the data center segment This decline can primarily be attributed to the shortage of such key components as controller ICs and PMICs Compared to other major NAND Flash suppliers, Intel mainly procures some of these components from a single source, thereby exacerbating the impact of the component shortage on its operations, including the shipment of enterprise SSDs Nevertheless, its ASP still grew by about 9% QoQ on the back of persistently strong demand from clients Intel’s quarterly revenue from its NAND Flash business reached US$1098 billion, a 08% QoQ decline, 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@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/

Press Releases
NAND Flash Contract Prices Likely to Increase by 5-10% QoQ in 3Q21 as Quotes Continue to Rise, Says TrendForce

2021/07/14

Semiconductors

The recent wave of COVID-19 outbreaks in India has weakened sales of retail storage products such as memory cards and USB drives, according to TrendForce’s latest investigations However, demand remains fairly strong in the main application segments due to the arrival of the traditional peak season and the growth in the procurement related to data centers Hence, the sufficiency ratio of the entire market has declined further NAND Flash suppliers have kept their inventories at a healthy level thanks to clients’ stock-up activities during the past several quarters Moreover, the ongoing shortage of NAND Flash controller ICs continues to affect the production of finished storage products Taking account of these demand-side and supply-side factors, TrendForce forecasts that contract prices of NAND Flash products will rise marginally for 3Q21, with QoQ increases in the range of 5-10% NAND Flash suppliers' push for higher-layered SSD products will likely limit the growth of client SSD contract prices in 3Q21 Several developments are expected to drive up client SSD demand in 3Q21 First of all, high demand for notebook computers at the moment has prompted notebook brands to maximize their production Furthermore, the release of CPUs based on Intel’s new Ice Lake platform is pushing up the SSD adoption rate At the same time, the average memory density of SSDs is increasing as NAND Flash suppliers experience tightening supply of SSD controller ICs On the supply side, as server shipments regain their former momentum and thereby significantly expand enterprise SSD procurement, the supply of NAND Flash will likely further tighten as a result, with NAND Flash suppliers now less willing to lower their prices when negotiating quarterly contracts On the other hand, NAND Flash suppliers also launched SSDs with higher-layered NAND Flash in 2Q21 in order to capture market share For instance, their main offerings have rapidly transitioned to 128L NAND Flash As suppliers raise production capacity for higher-layered products, the downward pressure on contract prices also becomes greater Hence, TrendForce forecasts that contract prices of client SSDs will rise by around 3-8% QoQ for 3Q21, showing a more moderate increase compared with 2Q21 Average contract prices of enterprise SSDs are expected to increase by 15% QoQ in view of price hikes across two consecutive quarters Stock-up activities for enterprise SSDs rebounded in the data center segment in 2Q21 after nearly three quarters of inventory adjustments The overall server procurement has also been growing over the quarters as government agencies and SMBs release tenders related to digital infrastructure Moreover, TrendForce has observed that the market release of server CPUs based on Intel’s new Ice Lake platform has led to an increase in the procurement capacity for enterprise SSDs Quotes for enterprise SSDs are expected to rise again for 3Q21 contracts NAND Flash suppliers are carrying just around 4-5 weeks of inventory and face short supply for other types of semiconductor components At the same time, server shipments are climbing These factors will raise quotes for the second consecutive quarter It should be noted that, among suppliers, Samsung has more flexibility in supplying SSDs due to having a higher share of in-house components for this category of storage product Therefore, Samsung will be dominant in influencing price negotiations over enterprise SSD contracts for 3Q21 In particular, the average contract prices of PCIe 4/8TB SSDs are expected to undergo a 15% QoQ increase in 3Q21, representing the largest price hike among all NAND Flash products for the quarter Contract prices of eMMC products are projected to rise by a modest 0-5% as low-density eMMC prices remain high With regards to eMMC products, the demand for consumer products such as TVs and tablets will grow further in 3Q21 because of the effect of the traditional peak season Additionally, sales of Chromebook devices are still fairly robust Hence, the demand for eMMC products will remain strong through 3Q21 Nonetheless, the shortage of NAND Flash controller ICs persists as foundries are still operating at a fully-loaded capacity Furthermore, eMMC production relies on older process technologies Therefore, low- and medium-density eMMC products are still in limited supply, and contract prices for this category of storage products are expected to keep climbing It should be pointed out that low-density eMMC products already underwent a considerable price hike that bordered on what the purchasing side considered unacceptable in 2Q21, so the room for further price hikes is limited TrendForce projects that contract prices of eMMC products will rise by 0-5% QoQ for 3Q21 Weaker than expected demand for smartphones portends a slight QoQ increase of 0-5% in UFS prices The recent spread of the COVID-19 pandemic in Southeast Asia has led several smartphone brands (including OPPO, Vivo, and Xiaomi) that manufacture and sell a considerable share of smartphones there to lower their annual production targets On the other hand, Apple is stocking up on components as it prepares for the release of the next iPhone series The iPhone-related demand, together with the traditional peak season for retailers in the second half of the year, will sustain the overall smartphone production and the demand for mobile storage, including UFS products NAND Flash suppliers have shifted their attention to the demand related to data centers and enterprise servers Their inventories are also at a relatively low level due to the strong growth in the procurement of enterprise SSDs Additionally, there is the ongoing shortage of controller ICs Hence, contract prices of UFS products are forecasted to rise again by 0-5% QoQ for 3Q21 Limited supply will likely lead to an 8-13% QoQ increase in NAND Flash wafer prices The mining of Chia has been pushing up the demand for high-performance and high-capacity SSDs (ie, channel-market products) since the second half of April, although the effect of the recent cryptocurrency craze has also been gradually waning Secondly, the latest wave of COVID-19 outbreaks in India has noticeably impacted domestic sales of memory cards and USB drives In addition, the demand for channel-market SSDs from the DIY PC market has been constrained as the ongoing shortage of graphics cards affects the production of customized PCs Finally, memory module houses are unable to increase NAND Flash procurement as well because of the undersupply of controller ICs The demand for NAND Flash wafers from module houses will become more limited due to the impact of component gaps on the production of finished storage products NAND Flash suppliers are giving priority to the demand related to data centers and enterprise servers Furthermore, NAND Flash bit consumption has increased significantly because the share of 4/8TB products in shipments of enterprise SSDs is growing rapidly Additionally, NAND Flash suppliers are maintaining a low level of inventory as the demand situation is healthy in the major application segments such as notebooks and smartphones Owing to these factors, NAND Flash suppliers have no inclination to expand the supply of NAND Flash wafers Even if demand starts to weaken, suppliers will continue to raise contract prices of NAND Flash wafers on a monthly basis for the sake of extending their gross margins TrendForce therefore projects that contract prices of NAND Flash wafers will rise by 8-13% QoQ for 3Q21 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@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/

Press Releases
Global NAND Flash Revenue for 1Q21 Rises by 5.1% QoQ Thanks to Better-Than-Expected Demand for Notebooks and Smartphones, Says TrendForce

2021/05/26

Semiconductors

Total NAND Flash revenue for 1Q21 increased by 51% QoQ to US$1482 billion, according to TrendForce’s latest investigations In particular, bit shipments rose by 11% QoQ, while the overall ASP dropped by 5% QoQ; hence, bit shipment growth offset the decline in the overall ASP Although NAND Flash demand from notebook computer and smartphone manufacturers remained high, clients from the data center segment exhibited relatively weak demand, since this segment had yet to leave the state of NAND Flash oversupply Contract prices for this quarter therefore still mostly showed a considerable QoQ drop On the other hand, OEMs/ODMs of end products began to increase procurement of NAND Flash products from the second half of January onward because they noticed that the shortage of NAND Flash controller ICs was affecting the production of medium- and low-density storage products Besides avoiding a possible supply crunch in the future, OEMs/ODMs were placing additional orders because they were preparing for a push to expand market share On account of these developments, the overall NAND Flash demand surpassed expectations in 1Q21 Turning to 2Q21, factors on the supply and demand sides have turned oversupply into a shortage and propelled quotes upward for the mainstream categories of NAND Flash products On the supply side, the shortage of NAND Flash controller ICs has worsened and resulted in a wider impact on the production of finished storage products On the demand side, clients in the data center segment and OEMs of enterprise servers are ramping up component procurement With prices rising and bit shipments growing, the quarterly total revenue is projected to register a QoQ increase for 2Q21 However, in the long term, the continuation of the shortage of controller ICs may cause prices of NAND Flash wafers to drop first and eventually constrain further revenue growth Samsung Samsung’s NAND Flash revenue went up for 1Q21 on account of several factors First, smartphone brands and notebook OEMs began to release significant upside demand starting in the second half of January Second, the demand for enterprise SSDs also grew as the previous quarter was a low base for comparison Samsung’s NAND Flash bit shipments for 1Q21 increased by nearly 12% QoQ, exceeding the original projection of 10% Although Samsung’s NAND Flash ASP fell by 5% because the whole NAND Flash market was still in a state of oversupply, its NAND Flash revenue for 1Q21 still rose by 70% QoQ to US$497 billion Kioxia Kioxia saw continuing growth in the sales of its SSDs in 1Q21 thanks to the strong demand for notebooks However, SSD sales were not enough to wholly offset the previous decline in its mobile NAND Flash sales All in all, the supplier’s bit shipments grew by about 5% QoQ for 1Q21 The general oversupply also led to a QoQ drop of around 7% in its ASP All in all, Kioxia’s revenue rose slightly by 10% QoQ to US$278 billion The calculation includes the revenue from the SSD business that Kioxia acquired from Liteon Western Digital Western Digital (WDC) recorded a QoQ increase of 8% in its bit shipments for 1Q21 due to the strong notebook demand as well as brisk sales of its SSDs and retail storage products However, its ASP dropped because contract prices for quarterly deals were arranged when the market was still in oversupply WDC can respond quickly to the latest changes in price trends because a significant share of its sales mix is comprised of products for the retail market, the channel market, and memory module houses Hence, its ASP fell by just 2% QoQ for 1Q21 On the whole, WDC’s NAND Flash revenue reached US$218 billion for 1Q21, up 69% from the previous quarter SK Hynix Mobile-related products comprise a large share of SK Hynix’s NAND Flash shipments, so the increase in the stock-up demand from Chinese smartphone brands boosted SK Hynix’s revenue performance in 1Q21 Among NAND Flash suppliers, SK Hynix recorded the highest QoQ growth rate in bit shipments (ie, 21%) for 1Q21 However, SK Hynix also recorded a QoQ drop of around 7% in its ASP because of the decline in contract prices and the issue of having high-density products account for a large share of its sales mix On the balance, SK Hynix’s NAND Flash revenue jumped 115% QoQ to US$183 billion for 1Q21 Micron Micron’s bit shipments rose by nearly 10% QoQ for its FY2Q21 (ended on March 4) due to stock-up activities by smartphone brands and notebook OEMs It is noteworthy that Micron’s QLC SSDs have been successfully incorporated into the gaming models of notebook OEMs, and this helps with the continuous growth of these particular products for the company Micron’s NAND Flash ASP fell by roughly 3% QoQ owing to the excess supply situation during quarterly contract negotiations Taken altogether, Micron’s NAND Flash revenue rose by 48% QoQ to US$165 billion for FY2Q21 Intel Despite the inventory reduction for data centers and enterprise server OEMs during 1Q21, bit shipments continued to rebound thanks to the gradually recovering demand Furthermore, the demand from PC OEMs remained vigorous Hence, Intel’s bit shipments grew by more than 10% QoQ for 1Q21 However, the decline in contract prices of enterprise SSDs resulted in a QoQ drop of around 4% in Intel’s NAND Flash ASP It is noteworthy that the revenue figures announced by Intel will not comprise of Optane SSD and any 3D XPoint products starting from 1Q21 Thus, the company’s revenue came to US$111 billion for 1Q21, down 84% from the previous quarter There would be a QoQ growth of 97% in revenue if the calculation includes only the “pure” NAND Flash products (ie, without 3D XPoint) 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@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/

Press Releases
Owing to High Demand from Smartphone Manufacturers, NAND Flash Revenue Undergoes Mere 2.9% QoQ Decline in 4Q20, Says TrendForce

2021/03/03

Semiconductors

The quarterly total revenue of the NAND Flash industry came to US$141 billion in 4Q20, showing a QoQ drop of 29%, 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 34% to US$4644 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 114% QoQ to US$2749 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 21% in its revenue to US$2034 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 02% to US$1639 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 29% to US$1574 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 48% to US$1208 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@trendforcecom

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