NAND Flash Wafer Prices Soar 25% in November

December 11th news, in light of sustained production cuts by industry giants such as Samsung, SK Hynix, and Micron, the price of NAND Flash wafers experienced a remarkable increase of over 25% in November. The reduction in supply following strategic cuts by Original Equipment Manufacturers (OEMs), coupled with their proactive price adjustments, compelled storage module manufacturers to reluctantly absorb the heightened costs. This trend gained momentum as market players anticipated further OEM price hikes, leading to an aggressive procurement of inventory and driving the continued price surge throughout December.

As a key player in the NAND Flash market, Samsung has consistently downscaled NAND Flash production since Q2, with a substantial expansion in September, reaching 50% of total capacity. This adjustment primarily targeted products with less than 128 layers of stacking, instilling market-wide confidence in the inevitability of price hikes.

The unexpected scale of production reduction by memory chip OEMs, combined with generally low inventory levels at client ends, has contributed to the ongoing increase in NAND Flash prices. In the latter half of the year, increased demand for Mobile DRAM and NAND Flash (eMMC, UFS) was driven not only by the traditional peak season but also by elevated production goals of prominent Chinese smartphone brands like the Huawei Mate 60 series. This sudden surge in demand has further propelled the rise in contract prices in the fourth quarter.

The most significant upswing in this round of memory chip price increases is observed in the prices of NAND Flash wafers. TrendForce's latest research indicates that NAND module manufacturers swiftly depleted their inventories due to increased customer orders, prompting requests for expanded supply from OEMs. However, OEMs persist in their production reduction strategies, resulting in a supply-demand imbalance and a robust rebound in NAND Flash wafer prices in November, exceeding a 25% increase according to TrendForce's data.

Industry insiders disclose that in the current scenario of limited supply and significantly increased demand, module manufacturers have no option but to accept the OEMs' substantial price increases. The industry landscape is characterized by intense competition as participants strive to secure inventory, driven by the anticipation that OEMs will continue raising prices.

Analyzing current market conditions, TrendForce predicts that NAND Flash prices will persistently rise in December amid tight supply. However, whether the price surge will continue significantly into the first quarter hinges on the OEMs' production reduction strategies and the market demand.

Reports suggest that certain OEMs are contemplating increased production capacity due to robust downstream demand. If OEMs expedite production increases and demand fails to demonstrate a clear improvement, the extent of price increases is expected to be significantly constrained.