NAND Flash Prices to Surge 13-18% in Q2 2024

March 28th - According to the latest report released by TrendForce, Kioxia and Western Digital (WDC) have increased their production capacity utilization rates since the first quarter of this year, while other suppliers have generally maintained low output strategies. Despite a slight decrease in NAND Flash procurement volume in the second quarter compared to the first quarter, the overall market sentiment continues to be influenced by reduced supplier inventories and production cuts. It is estimated that contract prices for NAND Flash will increase strongly by approximately 13-18% in the second quarter.

Forecasted NAND Flash price increases in Q2 2024 are as follows:

For eMMC, Chinese smartphone brands represent the largest demand source for this wave of eMMC products. With some suppliers reducing their supply of this category of products, shipments from Chinese module factories have significantly increased. To meet production demands, buyers are expanding their usage of module factory solutions, aiding in the further advancement of Chinese module factory technology and extending their reach to top-tier clients. In the face of a sharp rebound in NAND Flash wafer prices, it is projected that second-quarter eMMC contract prices will increase by 10-15%.

Regarding UFS, recent growth in demand for smartphones in India and Southeast Asia has supported momentum in second-quarter UFS orders. Chinese smartphone brand manufacturers have also increased orders in the second quarter to establish secure inventory levels, further supporting demand. Suppliers are keen to quickly achieve their profit and loss balance targets, thus the second-quarter UFS contract price is estimated to increase by 10-15%.

For Enterprise SSDs, boosted by rising demand from cloud service providers (CSPs) in North America and China, it is expected that the purchase volume of Enterprise SSDs in the first half of this year will grow quarterly. Due to the low order fill rate (OFR) for large capacity SSD orders, suppliers still dominate price trends, forcing buyers to accept the possibility of higher supplier prices. Additionally, some buyers are still attempting to increase inventory levels before the peak season in the latter half of the year. Therefore, the second-quarter contract price for Enterprise SSDs is estimated to increase by 20-25%, marking the highest increase among all product lines.

Regarding Client SSDs, as end sales remain in the off-season, buyers' stocking strategies are becoming more conservative, with some PC OEMs even starting to lower their 2Q24 stocking orders. Furthermore, constrained by PC brand manufacturers' inability to reflect NAND Flash price increases in finished products, they are further reducing second-quarter order volumes, which will suppress the growth of order momentum in the latter half of the year caused by this rapid price rebound. It is estimated that the second-quarter contract price for PC client SSDs will increase by less than Enterprise SSDs, with a quarterly increase of 10-15%.

In terms of NAND Flash Wafers, product sales have continued to weaken after the Lunar New Year holiday, with downstream customers no longer having stocking demands. However, this wave of price increases has made it impossible for suppliers to meet orders from Chinese smartphone brands, leading to orders being transferred to module factories. Consequently, Chinese module factories are maintaining high demand to expand cooperation with smartphone brands. As original manufacturers aim to achieve profit targets quickly, NAND Flash Wafer contract prices continue to rise. However, due to sluggish demand in the retail market, the price increase in the second quarter is significantly lower than that of the first quarter, with an estimated quarterly increase of 5-10%.