The first quarter of calendar year 2019 is drawing to a close and marked by the largest decline in NAND flash contract prices in many quarters. According to TrendForce's DRAMeXchange analysts, NAND wholesale prices fell 20% in the first quarter, the biggest decline since early 2018, when flash memory began to drop in price after a year and a half of rampant price increases. From low demand for Apple smartphones to sluggish demand for SSDs from data center owners, prices have come down, but this set of negative factors will continue to weaken their impact on the NAND market.
According to DRAMeXchange analysts, in the second quarter there will be a slowdown in the rate of decline in prices for NAND and for products based on flash memory. First, the demand for flash products for smartphones, PCs, servers and other electronics will gradually increase. Second, memory makers are cutting back on investment in plant and line expansion and slowing down the transition to better processes. Moreover, a number of companies go to a direct stop of production lines in order to somehow restrain overproduction. These actions will not have a drastic immediate impact on the balance between supply and demand, but will certainly slow down the rate at which NAND prices slide into the abyss of low profitability. Thus, according to experts, in the second quarter, the reduction in contract prices for flash memory will drop to 10-15% per quarter.
The biggest price drop since November 2017 has been for 256Gb NAND TLC. Since then, such chips have fallen in price by 70% to 0,08 cents per GB. In fact, these microcircuits are sold at cost, and manufacturers will discontinue their production. In return, memory vendors intend to offer higher-capacity base memory, driving up the price of memory cards and USB drives. This will also force device manufacturers to reconsider the filling of warehouses and start purchasing more capacious chips, which will also simulate an increase in demand for NAND. However, this will not lead to an increase in prices, just prices will begin to decline more slowly.
The market for NAND memory for smartphones is expected to revive. Samsung and Western Digital will actively offer higher-capacity UFS 3.0 drives, trying to price less than the competitor. uMCP modules will rise in volume to 256 GB, and mass 32 GB modules will begin to be replaced by 64 GB. The price of modules, as it were, will not fall and even grow, but due to the appearance of more capacious drives in devices. A similar situation is expected in the PC market. Vendors will urge you to buy 512GB and 1TB SSDs, which they hope to make a living from. However, the Grail for the NAND market will remain exclusively in the corporate segment with a shift in emphasis to PCIe drives. And prices will continue to fall...
Source: 3dnews.ru