NAND Prices Fall 50% in 2024, Samsung & Kioxia Cut Production

The global NAND flash memory market is currently facing a downturn, and the memory industry is expected to implement additional production cuts in response to reduced demand.

Reports indicate that Japanese memory manufacturer Kioxia plans to begin scaling back NAND production next month. Samsung Electronics in South Korea is also expected to follow suit, adjusting production levels to stabilize NAND supply prices.

This trend follows earlier reductions in NAND production by companies such as SK hynix, Micron, and Kioxia, which initiated selective cutbacks from the second half of 2022 through early 2023 due to a decline in NAND demand. Samsung Electronics began its own reductions in April 2023.

Lowering NAND production helps reduce excess inventory, thereby stabilizing prices. The ideal inventory turnover period for memory manufacturers is typically between 10 to 12 weeks.

Currently, the only sector seeing stable NAND prices is enterprise-grade SSDs used in data centers, which have benefited from increased AI demand. Other NAND products, however, have experienced significant price declines due to reduced demand from shrinking markets such as smartphones and laptops.

According to data released by market research firm DRAMeXchange on November 29, the price of general-purpose NAND has been in a downward trend since September. After rising for five consecutive months from October of last year, NAND prices began to plateau in March 2024 and dropped significantly in September. In fact, NAND prices decreased by 11.44% in September, 29.18% in October, and 29.8% in November, bringing the price of NAND from $4.90 in August to just $2.16 in November. This marks a drop of over 50% since the start of the year, reaching its lowest point since August 2015.

TrendForce, another leading market research firm, forecasts that NAND sales for Samsung and Kioxia will decline in Q4 2024 due to continued weak demand from the consumer sector. In particular, Kioxia's NAND sales are expected to decrease by more than 10% compared to the previous quarter.

TrendForce further predicts that the downward trend in NAND spot market prices will persist, with traders expressing concerns about potential additional losses as prices continue to fall sharply.