NAND Flash Contract Prices May Drop 8% in Q4 2024

According to the latest report from market research firm TrendForce, the contract prices of NAND Flash wafers have begun to decline in the third quarter of 2024, primarily due to weaker-than-expected demand during the traditional peak season. It is anticipated that prices will drop even further in the fourth quarter, with an expected decrease of over 10%. For module products, only Enterprise SSDs may see a slight increase of 0% to 5% in the fourth quarter, supported by stable orders. However, PC SSDs and UFS are facing more conservative purchasing strategies from buyers due to underwhelming sales of their end products.

· Price Forecast for Client SSDs: Decline of 5-10%

Despite manufacturers promoting AI-powered PCs, there has been no significant surge in replacements due to inflation and insufficient practicality of AI applications. On the supply side, production capacity has slightly increased as some manufacturers have resumed full operations in the third quarter and upgraded their production processes. However, with weak consumer market demand and the widening price gap between spot markets and OEM contracts, manufacturers are struggling to adjust prices. TrendForce predicts that the contract prices for PC client SSDs will decline by 5% to 10% in the fourth quarter.

· Enterprise SSD Prices: Growth Slows, Expected Increase of 0-5%

Due to delayed AI server deployments from some enterprise clients and a reduction in server OEM orders, overall procurement capacity in the fourth quarter is expected to decline compared to the third quarter. In addition, smartphone and laptop clients are reducing their NAND Flash orders as part of inventory reduction strategies. Despite a stable server market, the continued production growth among manufacturers is leading to oversupply. As a result, TrendForce expects Enterprise SSD contract prices to increase by only 0% to 5% in the fourth quarter.

· eMMC Prices: Decline of 8-13% Expected

The smartphone market has shown no signs of improvement in the third quarter, as manufacturers have been actively reducing their eMMC inventory and resisting price hikes. Although new devices such as the iPhone 16 and Huawei's foldable models are launching in the fourth quarter, cautious inventory strategies will be adopted to prevent oversupply. TrendForce predicts that, following a stalemate in price negotiations in the third quarter, the contract prices for eMMC in the fourth quarter will decline by 8% to 13%, with the market favoring buyers.

· UFS Prices: Decline of 8-13% Forecasted

UFS, primarily used in high-end smartphones, faces a similar market situation to eMMC. As economic growth slows, the upgrade cycle for smartphones has extended to three years or more. The absence of significant technological breakthroughs in smartphones has kept demand stagnant. With increasing competition between manufacturers and module producers, and weaker market demand, price concessions are expected in the fourth quarter to avoid inventory buildup. UFS contract prices are projected to drop by 8% to 13%.

· NAND Flash Wafer Prices: Expected Decline of 10-15%

Since the beginning of 2024, demand for Client SSDs, memory cards, and USB drives has been sluggish in the retail sector. Back-to-school and holiday season sales in Europe and the U.S. have also been disappointing. As a result, demand for NAND Flash wafers is expected to decline further in the fourth quarter.

TrendForce forecasts that contract prices for NAND Flash wafers will fall by 10% to 15%, and the decline may widen due to excess inventory and intensified price competition among manufacturers.