Kioxia to Cut NAND Flash Output, Prices May Stabilize

According to industry sources, Kioxia, one of the major NAND Flash suppliers, is set to reduce production in December 2024. This move is expected to help stabilize or even reverse the decline in NAND Flash prices. Additionally, strong demand from the server sector is anticipated to continue driving NAND Flash requirements.

Market research firm TrendForce reports that NAND Flash will face greater challenges in the fourth quarter of 2024. While enterprise-grade SSD prices are expected to remain stable, prices for other product categories have already begun to decline. Furthermore, consumer brand manufacturers are expected to lower inventories by the end of the year, which will significantly dampen order momentum.

Sources from the industry suggest that Kioxia's planned production cut in December 2024 will help halt the price slide or potentially lead to price increases. After completing data center expansions, cloud service providers (CSPs) are expected to shift their capital expenditures toward enterprise-grade SSDs. This trend will continue to drive demand for 16TB and higher-capacity enterprise-grade SSDs, signaling a less pessimistic outlook for the market.

In the short term, NAND Flash pricing is still impacted by the significant product offload from mainland China-based module manufacturers, who are experiencing losses. As a result, spot and contract prices are expected to decrease by 5-10% each quarter. However, with the production cuts by manufacturers, strong demand for high-capacity eSSDs for AI servers and general-purpose servers, and the expected rebound in consumer product demand, the NAND Flash market is anticipated to return to supply-demand balance by 2025.

Regarding revenue, TrendForce notes that global NAND Flash shipments in Q3 2024 declined by 2% quarter-over-quarter. However, average selling prices (ASP) rose by 7%, driving overall revenue to $17.6 billion, a 4.8% increase compared to the previous quarter.

TrendForce also highlights that NAND Flash pricing trends in Q3 2024 were mixed across different application sectors. Strong demand for enterprise-grade SSDs drove average prices up by nearly 15%, while client-grade SSD prices saw only modest growth due to reduced orders.