SHENZHEN, China, Sept. 29, 2022 /PRNewswire/ -- Utmel, a professional electronic component distributor, informs buyers that NAND flash prices are expected to fall 15-20% in Q4.
NAND Flash is currently in oversupply, according to market research firm TrendForce. Buyers have focused on de-stocking and drastically reduced their purchases since the second half of the year, and sellers have offered broken prices to consolidate orders, causing wafer prices to fall by 30-35% in the third quarter. However, all kinds of NAND Flash end products are still weak, leading to a rapid rise in original factory inventory and an expansion of NAND Flash price drop to 15~20% in the fourth quarter.
The majority of the original NAND Flash product sales will also officially begin to lose money from the end of this year, meaning that some suppliers are under pressure to operate at a loss, for taking production cuts to reduce losses is a possible way to respond.
As the purchasing demand in the second half of 2022 is far lower than that in the first half of the year, and PC brands are not optimistic about the demand next year, reducing inventory is the top priority, which makes suppliers increase the price elasticity of Client SSD to rush shipment.
However, the shipment of PCIe 4.0 SSD continues to rise this year, and more suppliers launch 176-layer products to promote the penetration of this interface. Especially, 512GB has become the focus of supply early. Coupled with the large quantity of QLC SSD supply, the supply side generally locked 512GB capacity and adopted the strategy of binding volume or combined bargaining for two consecutive quarters, intensifying the price competition of this capacity. It is estimated that the SSD price of PC Client will expand by 15-20% in the fourth quarter.
The expected decline in server shipments in the fourth quarter led to a decline in purchases. However, when the demand for consumer products decreased significantly, the original manufacturers were eager to expand the sales of Enterprise SSD. Especially, American manufacturers began to offer 176-layer products to compete for the market, and Solidigm also launched SK Hynix 128-layer Enterprise SSD for customers to verify. At the same time, Kioxia is actively cooperating with North American cloud service providers on PCIe 4.0 SSD, and the price competition among suppliers is bound to intensify as more products enter the market. Therefore, it is predicted that the price of Enterprise SSD will fall by 15-20% in the fourth quarter.
The low demand for Chromebooks and TVS makes buyers negative towards eMMC stocking; As for the demand visibility of Netcom products is expected to extend to the end of the year, but considering the overall weak demand, the exclusive strength of Netcom products still has limited support for the demand of eMMC.
With demand for consumer goods weak and supply and output maintaining growth, inventory pressure forced original factories to offer low prices in the third quarter to stimulate buyers' purchasing intentions for the second half of the year. However, buyers generally demand for orders mainly in small quantities and multiple batches, which will lead to eMMC price decline to the end of the year, the eMMC price is estimated to fall about 13~18% in the fourth quarter.
As the smartphone market, the primary application of UFS, continues to deteriorate and traditional peak season sales are not as strong as in the past, brands maintain high inventories of the entire machine or parts, and willingness to pull UFS has decreased.
Therefore, from the third quarter, the original factory began to seek bound volume delivery, actively attract brands with low prices, and successively reached supply agreements with some Chinese brand customers. Up to now, the attitude of the original factory hopes that customers can negotiate in advance for next year's demand. However, because the market is generally not optimistic about next year's demand, leading to the original factory transaction situation is not good, the inventory pressure has not been significantly improved, so the original factory will continue to increase the price decline to stimulate the momentum of drawing goods. In the fourth quarter, UFS prices are forecast to fall by around 13-18 %, with further declines possible.
-NAND Flash wafer
Although some module factories have relieved some of the inventory pressure after several seasons of inventory adjustment, overall market conditions remain bleak, resulting in a very passive stocking attitude.
The demand for SSD, flash memory cards, USB disks, and other products at the retail end are still weak along with the consumer products, which cannot become the power to support the wafer price. Meanwhile, the supply side continued to amplify the supply of wafers, and the pace of the manufacturing process moving to higher layers was not slowed down. Since the downward trend of prices is inevitable, the pressure on the original factory is to accelerate the process transformation to optimize the cost structure.
In addition, the original factory began to cut the price from the third quarter, leading to the contract price of wafers rapidly approaching the cash cost of each factory. Institutional observation believes that NAND Flash in the framework of a perfectly competitive market, suppliers intended to accelerate the bottom of wafer prices, the fourth quarter NAND Flash wafer price decline is estimated to be a quarterly reduction of 20-25 percent.
UTMEL is a well-known supplier of electronic products and strives to provide its products with high quality and minimum price possible.
As the Utmel grows, it has recently launched a lot of activities on 800 passive components and 505 Active components to express thanks to the clients
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