NAND Flash Industry Revenue Declines as Buyers Remain Cautious

First-quarter NAND Flash buyers were conservative in their purchasing momentum, while suppliers continued to lower prices in an attempt to sell their products. However, the shipment volume of NAND Flash bits in the first quarter only saw a slight quarterly increase of 2.1%, with an average selling price (ASP) decrease of 15% for the quarter. The total revenue for the NAND Flash industry was approximately $8.63 billion, a quarterly decline of 16.1%. SK Group (SK Hynix Solidigm) and Western Digital Corporation (WDC) both experienced a decline in volume and price, impacting their revenue performance, with both seeing a quarterly decline of over 20%.

Looking at the market conditions for this quarter, Samsung's decision to join the production reduction efforts has led to an observed increase in buyers' willingness to purchase, particularly from module manufacturers and PC original equipment manufacturers (OEMs). The overall NAND Flash bit shipment volume for the second quarter is estimated to increase by 5.2% for the quarter. However, due to the pressure of inventory clearance still weighing on manufacturers, the ASP for all products will continue to decline. It is expected that the revenue for the NAND Flash industry will continue to decline in the second quarter, with a quarterly decline of approximately 7.9%.

SK Group's NAND Flash revenue in the first quarter was only $1.32 billion, a quarterly decline of 24.8%. In the SSD sector, which accounted for over half of the total revenue in the previous fourth quarter, weak demand in the PC market resulted in the first quarter's revenue share dropping to only 20-25%. Similarly, Western Digital Corporation was also affected by weak seasonal demand, with NAND Flash revenue of approximately $1.31 billion in the first quarter, a quarterly decline of 21.1%.

Samsung continued to promote high-capacity products to increase the shipment volume of NAND Flash bits, as the demand for the three major end applications, including servers, laptops, and smartphones, showed no signs of improvement. This resulted in a quarterly ASP decline of 18.3%, with first-quarter NAND Flash revenue of approximately $2.93 billion, a quarterly decline of 15.8%. As for Kioxia, the demand side continued to be affected by weak consumer momentum, and major end application customers also continued to adjust their inventory, leading to a significant decline of 20.3% in the average selling price in the first quarter. However, the shipment volume of NAND Flash bits increased by 18% for the quarter, resulting in a total first-quarter NAND Flash revenue of approximately $1.85 billion, a quarterly decline of 5.9%.

Micron's first-quarter NAND Flash revenue declined by 19.8%, reaching $890 million. As PC and mobile customers' inventory levels have returned to a healthy level, Micron expects its inventory peak to have occurred in the first quarter. With ongoing production reduction measures, they hope to quickly overcome the situation of oversupply.