From a decline of 5~10% to a rise of 3~8%, flash memory price forecast in the second quarter

According to the TrendForce survey, the NAND Flash supply side in the second quarter, led by Samsung, YMTC, SK Hynix and Intel, still maintained a positive expansion trend. The quarterly output growth of estimated bits can reach nearly 10%; the demand side is benefited from the continuous support of orders from PC OEMs and Chinese mobile phone brand factories since the first quarter, and the data center customers will resume purchasing momentum from the second quarter support. However, the problem of tight supply of NAND Flash controllers still exists, which in turn stimulates buyers to actively stock up.

It is expected that the price of NAND Flash in the second quarter will decrease slightly by 5-10% from the first quarter to an increase of 3-8%. At present, Samsung’s factory in Austin, Texas, USA has not fully resumed work, and there are greater concerns about the next controller supply, which will further limit Samsung’s supply capacity in client SSDs. Therefore, it cannot be ruled out that the contract price may rise more than the current forecast.

Affected by the delayed resumption of work at Samsung’s Texas factory, client SSD and enterprise SSD rose simultaneously

Taking clients SSD as an example, the demand for the home economy driven by the epidemic continues to ferment. It is expected that the demand for notebook computers will remain strong in the second half of the year, and PC OEM brand factories have also increased their stocking quantities to meet production needs. And thanks to the support of strong demand for orders, the supply side is also expected to maintain inventory at a healthy level. However, the shortage of NAND Flash controller supply still exists. In addition, due to the power outage and shutdown of Samsung’s Texas plant, some orders could not be delivered in the second quarter, which made the supply of finished products even tighter. It is estimated that the client SSD price in the second quarter Will therefore rise 3~8%.

Take enterprise SSD as an example, the demand for the second quarter will begin to rebound from the bottom. The main reason is that after the data center has undergone inventory adjustment, the purchasing momentum will pick up in the second quarter. In addition, the demand for information equipment from the government, medical care, and financial institutions will emerge one after another. In addition, There are also Chinese telecom industry bids, and the help of small and medium-sized enterprises around the world starting to increase orders for information equipment.

The supply-side inventory level has also improved as it continues to benefit from the strong demand for laptops and smartphones. The pressure to reduce prices and sell is no longer there. The contract price will also stabilize as the overall market demand rises. Enterprises are expected to rise in the second quarter. SSD prices will increase by 0~5%.

Chromebook demand is the cornerstone of eMMC quotation support, UFS increase is the most convergent

Taking eMMC as an example, the first half of the year generally showed a trend of low season, and the strong demand for Chromebooks in the second quarter was one of the key points supporting the quotation of this product.

In addition, also affected by the shortage of NAND Flash controllers, buyers such as consumer electronics manufacturers increase their purchasing power to increase their inventory, and the overall order demand is gradually increasing. However, controller components are still out of stock due to the full capacity of upstream foundries, and suppliers only use 2D or up to 64-layer products for eMMC products with capacities below 32GB, due to the fact that these older generations of Production capacity has already begun to shift to 3D NAND or directly reduce production, so the gap between supply and demand is relatively stable, and it is not easy to see long-term price declines.

On the whole, due to the shortage of controller ICs in the short term, the supply of finished products is still in short supply. It is expected that eMMC will rise again by 3-8% in the second quarter.

Taking UFS as an example, since the fourth quarter of 2020, thanks to the active stocking of brands such as OPPO, Vivo and Xiaomi, as well as the division of the New Honor brand, UFS products mainly used in smartphones have reached this year. Demand remained fairly strong in the second quarter. In addition, also affected by the possible shortage of controller components or NAND Flash, buyers are also actively raising the inventory level, which in turn pushes up the overall demand.

In terms of suppliers, the inventory level has also dropped significantly due to the substantial stocking of mobile phone brands. Although Chinese mobile phone brands have not continued to increase their demand, their performance is still strong. In addition, it is generally expected that the data center’s momentum in pulling goods will be in the first place. The second quarter starts, so suppliers will maintain active quotations. However, due to the high consumption of smart phone customers, it is not easy for suppliers to adjust their prices significantly. Therefore, it is estimated that the price increase is still more restrained than that of other products and remains at 0-5%.

Low gross profit will reduce market supply, and it is estimated that NAND Flash wafer will rise by 5~10%

Taking the NAND Flash wafer as an example, we have not observed any significant improvement in the sales performance of products such as SSDs, memory cards, and flash drives that are retailed at the terminal, and the current NAND Flash original factory has not been able to deliver due to insufficient supply of controller ICs. It is expected that module makers will receive more inquiries from OEMs, boosting their demand for NAND Flash wafers in the next one to two quarters, but the overall purchasing momentum will still depend on whether the supply of controllers eases.

On the supply side, firstly, thanks to the stocking momentum of smartphone customers from the fourth quarter of 2020, the inventory levels of various suppliers are healthy; secondly, the demand for notebook computers continues to rise, and the demand for data centers is expected to recover in the second quarter, so supply The manufacturer decided to reduce the supply of the NAND Flash wafer market with lower gross profit.

Overall, under the influence of strong demand for mainstream products, it is expected that the contract price of NAND Flash wafer products will rise again by 5~10%.

 

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