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2022/02/22
In 4Q21, NAND Flash bit shipments grew by only 33% QoQ, a significant decrease from the nearly 10% in 3Q21, according to TrendForce’s investigations ASP fell by nearly 5% and the overall industry posted revenue of US$185 billion, a QoQ decrease of 21% This was primarily due to a decline in the purchase demand of various products and a market shift to oversupply causing a drop in contract prices In 4Q21, with the exception of enterprise SSD, the supply of which was limited by insufficient upstream components, the prices of other NAND Flash products such as eMMC, UFS, and client SSD, all fell
TrendForce’s summary of NAND Flash market sales performance in 2021 is as follows: although there have been signs of weakening since 2H21, thanks to remote services and cloud demand driven by the pandemic, revenue performance still grew significantly compared to 2020 Revenue reached US$686 billion, up 211% YoY, the second-biggest increase since 2018
NAND Flash revenue fell for most manufactures in 4Q21 due to PC OEM destocking
There were some changes to the top three NAND Flash revenue rankings in 4Q21 compared 3Q21, Samsung and Kioxia remained in the top two while third place was replaced by Western Digital (WDC) Although there was still demand coming from data centers, as PC OEMs continued to deplete client SSD inventories and demand from China's smartphone market weakened, stocking momentum was affected by component mismatch issues, resulting in a decline of approximately 5% in Samsung Electronics' bit shipments in 4Q21 After the market shifted to oversupply, ASP also fell by approximately 5%, leading to Samsung Electronics posting 4Q21 revenue of US$6110 billion, a QoQ decrease of 61%
Second ranked Kioxia continued seeing strong demand from data center clients in 4Q21 but this was offset by inventory adjustment and reduced purchasing on the part of PC OEMs Bit shipments declined slightly by 1% and ASP remained flat even in the face of weakening market demand, which was better performance than that of other suppliers in the same period Revenue in 4Q21 reached US$3543 billion, a QoQ decrease of 26%
WDC was another company that benefited from continued strong stocking demand from major US smartphone clients for new 5G flagship phones which offset the impact of weak client and enterprise SSD sales, for bit shipment growth of 13% However, as the proportion of consumer goods grew, ASP declined by 6% WDC’s NAND Flash division posted 4Q21 revenue of US$262 billion, a QoQ increase of 52%
Benefiting from continued stocking from data center clients and US-based smartphone brands, SK hynix's bit shipment growth remained above 10%, in line with original forecasts However, ASP was affected by weaker mobile phone shipments in China and inventory adjustment at PC OEMs Pricing fell by nearly 10% which offset overall growth momentum Revenue posted by SK hynix's NAND Flash division in 4Q21 increased by 28% to US$2615 billion
Micron was similarly affected by inventory adjustments undertaken on the part of PC OEMs and data center clients Although Micron's 176-layer products continue to be adopted, shipments in 4Q21 were flat compared to 3Q21 and ASP fell approximately 5% as the growth rate of supply outpaced demand, leading to a decline of 47% in Micron's 4Q21 NAND Flash revenue to US$1878 billion
Solidigm's 4Q21 production capacity was still being affected by the impact of supply chains (such as PMIC supply) on enterprise SSD, resulting in a continued decline in bit shipments of nearly 5% in 4Q21 At the same time, while orders for laptops are still strong, Solidigm actively increased bits shipments of PC QLC SSDs in order to reduce production capacity, causing a drop in ASP and a 4Q21 NAND Flash revenue performance of only US$996 million, a 99% decline
Looking forward to 1Q22, TrendForce states that with the advent of the demand off-season, demand for major applications will show a seasonal decline, exacerbating the phenomenon of oversupply and driving the contract price of products to fall further Falling prices and shrinking volume is expected to further reduce the revenue level of the NAND Flash industry Referencing information released by TrendForce on Feb 10, it is worth noting that market expectant psychological factors in 2Q22 generated from the previous Kioxia and WDC raw material pollution incidents will change the supply and demand situation after February and certain products with additional orders and non-quarterly contract prices will immediately reflect a pricing increase This will help reduce the decline in the output value of NAND Flash in 1Q22
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/
2022/02/10
WDC recently stated that certain materials were contaminated in late January at NAND Flash production lines in Yokkaichi and Kitakami, Japan which are joint ventures with Kioxia, according to TrendForce’s investigations Before this incident, TrendForce had forecast that the NAND Flash market will see a slight oversupply the entire year and average price from Q1 to Q2 will face downward pressure However, the impact of WDC’s material contamination issue is significant and Samsung’s experience during the previous lockdown of Xi'an due to the pandemic has also retarded the magnitude of the NAND Flash price slump Therefore, the Q1 price drop will diminish to 5~10% In addition, according to TrendForce, the combined WDC/Kioxia NAND Flash market share in the 3Q21 was as high as 325% The consequences of this latest incident may push the price of NAND Flash in Q2 to spike 5~10%
The contaminated products in this incident are concentrated in 3D NAND (BICS) with an initial estimate of 65exabytes (approximately 6,500M GB) affected According to TrendForce, damaged bits account for 13% of the group's output in 1Q22 and approximately 3% of the total output for the year The normal production schedule for the entire line has yet to be confirmed It is worth noting that the damages announced by WDC likely do not account for total losses stemming for this event and the number of damaged Kioxia parts has not been aggregated, so the total number of affected bits may increase further
Production primarily focused on Client SSD and eMMC, subsequent spot pricing may climb
Currently, WDC and Kioxia are focused on supplying PC client SSD and eMMC products Since WDC is the number two and number one supplier in the client SSD and eMMC markets, respectively, subsequent supply will inevitably be hampered Therefore, even if production demand for PC OEM is revised downward in Q2, client SSD prices may remain resistant to decline In terms of enterprise SSD, Kioxia PCIe 40 has been verified by a number of customers and the company's market share in 2022 was originally forecast to increase However, this incident will impact Kioxia’s ability to ship product and further affect subsequent customer procurement Therefore, in order for buyers to satisfy their own production requirements, a Q2 decline in enterprise SSD product pricing will be largely restrained
In addition, as buyers and sellers in the spot market are still clarifying events and incident assessments, they mostly responded by suspending quotations, with no new quotations having been generated However, TrendForce’s assessment indicates that subsequent events will obviously stimulate spot price appreciation Judging from contract pricing, any orders negotiated on a whole quarter basis should be unaffected in the near-term but there may be an immediate price increase in wafer quotations this February and March
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/
2022/01/24
NAND Flash prices for 1Q22 are expected to decline by 8-13% QoQ, compared to TrendForce’s previous forecast of 10-15% QoQ, primarily due to PC OEMs’ increased orders for PCIe 30 products and the impact of the lockdown in Xi’an on PC OEMs’ price negotiation approaches To mitigate potential risks in logistics, NAND Flash buyers are now more willing to accept a narrower decline in contract prices in order to obtain their products sooner However, as the Xi’an lockdown has not noticeably affected the local fabs’ manufacturing operations, the movement of NAND Flash contract prices going forward will likely remain relatively unaffected by the lockdown
In addition, TrendForce finds that the daily number of new COVID-19 cases in Xi’an has recently undergone a noticeable drop, and the local government has also announced that that the emergency level has been downgraded As such, Samsung’s and Micron’s local production facilities are returning to normal with respect to workforce and operational capacity Samsung’s local production base manufactures NAND Flash products, whereas Micron’s local production base is responsible for the testing and packaging of DRAM chips as well as the assembly of DRAM modules The impacts of the lockdown mainly relate to delays in the deliveries of memory products to customers On the other hand, the event has not caused a tangible loss in memory production
Lockdown in Xi’an has not caused a notable rise in NAND Flash spot prices because most spot buyers already carry a high level of inventory
Regarding NAND Flash spot prices, suppliers temporarily suspended quote offering immediately after the event due to concerns about the fallout As a result, the general decline in NAND Flash spot prices has more or less come to a halt However, there has been no accompanying signs of spot buyers rushing to procure more products, and the overall transaction volume remains fairly low TrendForce’s latest survey of the spot market finds that buyers still have plenty of stock on hand and are not in a hurry to procure NAND Flash products at the prices that are currently being offered
Decline in client SSD and UFS prices for 1Q22 is expected to narrow
Regarding the contract prices of major NAND Flash products, their overall decline has been narrower than previously expected For instance, despite the weakening demand for Chromebooks, notebook production on the whole has been improving as component gaps become gradually resolved, while demand for commercial notebooks also provides some upward momentum for the overall shipment of notebook computers As a result, the QoQ decline in notebook shipment for 1Q22 has been narrower compared to prior first quarters Furthermore, lower-than-expected shipment of Intel’s latest Alder Lake CPUs, which support PCIe 40 interface, has led certain PC OEMs to ramp up their orders for PCIe 30 SSDs in order to meet their PC shipment targets for 1Q22 However, SSD suppliers have already begun gradually transitioning their material preparation to PCIe 40 SSD instead, thereby creating a gap between the supply and demand of PCIe 30 SSDs As well, the Xi’an lockdown has prompted client SSD buyers to scramble to lock in their required delivery volumes Taken together, these factors have lessened the decline in client SSD prices for 1Q22 from the previous 5-10% QoQ to 3-8% QoQ
Regarding smartphones, not only has demand remained relatively sluggish, but smartphone brands are also still holding a relatively high level of eMMC/UFS inventory, meaning these brands are not particularly willing to negotiate prices for high volumes of mobile NAND Flash storage at the moment On the other hand, thanks to increased orders from PC OEMs since November 2021, NAND Flash suppliers’ inventory levels have fallen somewhat Hence, the decline in mobile NAND Flash storage quotes has in turn narrowed slightly Contract prices of UFS products are now expected to decrease by 5-10% QoQ in 1Q22 instead of 8-13% QoQ as previously expected Finally, contract prices of server SSD and NAND Flash wafers are expected to decline by 3-8% QoQ and 10-15% QoQ, respectively, in 1Q22, in line with prior expectations
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/
2021/12/30
Currently, the consequences of Xi’an’s lockdown on Samsung is weighted most heavily towards the difficulty of scheduling shifts for personnel, according to TrendForce’s investigations Due to restrictions on movement and other lockdown measures, Samsung must continue operations with limited manpower Samsung is currently making active adjustments to reduce impact on output and the local government expects a return to normalcy within one to two weeks However, if the pandemic is not properly controlled, short-term impact on the production utilization rate of the local factory campus cannot be ruled out, resulting in a slight decline in output As for raw materials required for production such as water and power, supply seems to remain sufficient, though Samsung is still confirming the specific degree of any impact
Production has not been interrupted at Samsung’s Xi’an plant, the company’s remedy is reduced operational scale which may affect utilization rate
Following up on TrendForce’s previous press release, Samsung’s two major NAND Flash fabs in Xi’an are still manufacturing without experiencing significant disruptions at this moment However, with the local authority enforcing even stricter restrictions on the movements of people, Samsung has been compelled to perform some temporary operational adjustments to the two fabs With respect to end-products, facilities in the Xi’an region are primarily responsible for the assembly of consumer electronics such as UFS and client SSDs, meaning changes in the Xi’an fabs’ operations will have a direct impact on the procurement activities of smartphone and notebook computer manufacturers However, as Samsung’s inventory level is still relatively high, the company should be able to keep supplying these products to buyers with no issues in the short run, although the decline in the these products’ prices may moderate somewhat
Judging by the performance of the NAND Flash spot market on December 29, TrendForce further indicates that most suppliers have now stopped giving price quotes for NAND Flash products after Samsung released an official statement on the Xi’an matter Regarding the forecast of NAND Flash contract prices for 1Q22, TrendForce will continue to closely monitor responses by Samsung as the pandemic progresses If the lockdown continues, the decline in NAND Flash contract prices may potentially see a further tapering
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/
2021/12/24
The Chinese city of Xi’an has been placed under lockdown due to a local outbreak of the Delta variant, although it remains uncertain as to when the lockdown will end, according to TrendForce’s latest investigations Samsung operates two memory fabs in Xi’an, both of which are responsible for the manufacturing of high-layer count 3D NAND Flash products, and wafer inputs at the two fabs account for 425% of Samsung’s total NAND Flash production capacity and 153% of the global total At the moment, the lockdown of the city is not expected to have a notable impact on these fabs
Nevertheless, the municipal government has been authorized to enforce very severe restrictions on the movements of people and goods in and out of the city during this lockdown While Samsung has finished arranging most of the memory product shipments for the period from the end of 2021 to middle of January next year, the company could face logistical issues related to the Xi’an lockdown in the near future and experience delays in shipments Samsung’s clients, in turn, could have difficulties planning their procurement activities because deliveries of memory components are not in accordance with the originally set dates Additionally, the same logistical issues could cause delays in the deliveries of production-related materials to Samsung’s fabs in Xi’an However, the fabs have sufficient inventory to continue normal production over the next several months
On the other hand, Xi’an is a strategically important location for both Samsung’s NAND Flash production and Micron’s memory packaging and testing operations TrendForce’s investigations indicate that the lockdown will likewise have no impact on Micron’s packaging and testing operations, although potential issues with logistics still remain to be seen In any case, while memory packaging and testing capacities in Xi’an account for a relatively low share of the company total, the lockdown may potentially affect spot prices of DRAM products in the short run
Short-term DRAM and NAND Flash spot prices may bump up
In terms of pricing, the spot price of NAND Flash has not fluctuated significantly due to the lockdown event Both buyers and sellers hold significant inventory in the current spot market Recent trading volume has been weak and price fluctuations have been small TrendForce will continue to observe subsequent reactions in the NAND Flash spot market and does not rule out the possibility of a short-term price bump due to the expected psychological impact triggered by the lockdown event
In terms of NAND Flash contract pricing trends moving forward, since production is unaffected, TrendForce still maintains its original opinion, forecasting that average pricing in 1Q22 will fall by 10-15% However, because the impact of logistics is difficult to predict, the purchasing side may have to increase orders from other suppliers, further fueling a bargain-seeking mentality The possibility of seeing a flattening in the amplitude of contract price declines for various NAND Flash products in the first quarter of next year cannot be ruled out
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/
