memory price


2022-02-22

Total NAND Flash Revenue Drops 2.1% QoQ in 4Q21 Due to Slowing Demand and Falling Prices, Says TrendForce

In 4Q21, NAND Flash bit shipments grew by only 3.3% QoQ, a significant decrease from the nearly 10% in 3Q21, according to TrendForce’s investigations. ASP fell by nearly 5% and the overall industry posted revenue of US$18.5 billion, a QoQ decrease of 2.1%. This was primarily due to a decline in the purchase demand of various products and a market shift to oversupply causing a drop in contract prices. In 4Q21, with the exception of enterprise SSD, the supply of which was limited by insufficient upstream components, the prices of other NAND Flash products such as eMMC, UFS, and client SSD, all fell.

TrendForce’s summary of NAND Flash market sales performance in 2021 is as follows: although there have been signs of weakening since 2H21, thanks to remote services and cloud demand driven by the pandemic, revenue performance still grew significantly compared to 2020. Revenue reached US$68.6 billion, up 21.1% YoY, the second-biggest increase since 2018.

NAND Flash revenue fell for most manufactures in 4Q21 due to PC OEM destocking

There were some changes to the top three NAND Flash revenue rankings in 4Q21 compared 3Q21, Samsung and Kioxia remained in the top two while third place was replaced by Western Digital (WDC). Although there was still demand coming from data centers, as PC OEMs continued to deplete client SSD inventories and demand from China’s smartphone market weakened, stocking momentum was affected by component mismatch issues, resulting in a decline of approximately 5% in Samsung Electronics’ bit shipments in 4Q21. After the market shifted to oversupply, ASP also fell by approximately 5%, leading to Samsung Electronics posting 4Q21 revenue of US$6.110 billion, a QoQ decrease of 6.1%.

Second ranked Kioxia continued seeing strong demand from data center clients in 4Q21 but this was offset by inventory adjustment and reduced purchasing on the part of PC OEMs. Bit shipments declined slightly by 1% and ASP remained flat even in the face of weakening market demand, which was better performance than that of other suppliers in the same period. Revenue in 4Q21 reached US$3.543 billion, a QoQ decrease of 2.6%.

WDC was another company that benefited from continued strong stocking demand from major US smartphone clients for new 5G flagship phones which offset the impact of weak client and enterprise SSD sales, for bit shipment growth of 13%. However, as the proportion of consumer goods grew, ASP declined by 6%. WDC’s NAND Flash division posted 4Q21 revenue of US$2.62 billion, a QoQ increase of 5.2%.

Benefiting from continued stocking from data center clients and US-based smartphone brands, SK hynix’s bit shipment growth remained above 10%, in line with original forecasts. However, ASP was affected by weaker mobile phone shipments in China and inventory adjustment at PC OEMs. Pricing fell by nearly 10% which offset overall growth momentum. Revenue posted by SK hynix’s NAND Flash division in 4Q21 increased by 2.8% to US$2.615 billion.

Micron was similarly affected by inventory adjustments undertaken on the part of PC OEMs and data center clients.  Although Micron’s 176-layer products continue to be adopted, shipments in 4Q21 were flat compared to 3Q21 and ASP fell approximately 5% as the growth rate of supply outpaced demand, leading to a decline of 4.7% in Micron’s 4Q21 NAND Flash revenue to US$1.878 billion.

Solidigm’s 4Q21 production capacity was still being affected by the impact of supply chains (such as PMIC supply) on enterprise SSD, resulting in a continued decline in bit shipments of nearly 5% in 4Q21. At the same time, while orders for laptops are still strong, Solidigm actively increased bits shipments of PC QLC SSDs in order to reduce production capacity, causing a drop in ASP and a 4Q21 NAND Flash revenue performance of only US$996 million, a 9.9% decline.

Looking forward to 1Q22, TrendForce states that with the advent of the demand off-season, demand for major applications will show a seasonal decline, exacerbating the phenomenon of oversupply and driving the contract price of products to fall further. Falling prices and shrinking volume is expected to further reduce the revenue level of the NAND Flash industry. Referencing information released by TrendForce on Feb. 10, it is worth noting that market expectant psychological factors in 2Q22 generated from the previous Kioxia and WDC raw material pollution incidents will change the supply and demand situation after February and certain products with additional orders and non-quarterly contract prices will immediately reflect a pricing increase. This will help reduce the decline in the output value of NAND Flash in 1Q22.

2022-02-17

Overall DRAM Output Decreased Nearly 6% QoQ in 4Q21 Due to Decline in Shipments and Pricing, Says TrendForce

The pandemic has impeded the supply of many end-user devices such as smartphones, servers, PCs, and niche consumer electronics components, indirectly leading to a decline in a willingness on the procurement-end to stock relatively abundant memory chips, according to TrendForce research. This is most obvious in the stance of PC OEMs holding more than 10 weeks or more of DRAM inventory. Therefore, most DRAM fabs experienced a drop in shipments in the fourth quarter of 2021 and declining purchasing momentum has also led to a downward trend in DRAM price quotations. Total 4Q21 DRAM output value decreased by 5.8% QoQ, reaching US$25.03 billion, with only a few suppliers such as SK hynix bucking this trend.

Looking forward to 1Q22, although material shortages for some components can be alleviated, the first quarter is already an off season for demand and buyers’ inventories are still flush. Thus, the purchasing-side will largely concentrate on destocking, with overall purchasing momentum remaining sluggish. Thus, DRAM pricing in the first quarter of this year is expected to face greater pressure than in the fourth quarter of last year and overall DRAM output value may fall further.

4Q21 DRAM price drop causes downturn in manufacturer profit levels

In terms of revenue performance, price quotations from the three major DRAM manufacturers all declined with slightly differing shipments trends. Shipments from both Samsung and Micron fell due to poor end-user demand, with revenue down 9% and 8%, respectively. In terms of market share, Samsung dropped slightly to 42.3% while still ranking first, SK hynix climbed to nearly 30%, ranking second, and Micron dropped slightly to 22.3%.  Pricing gaps between these three DRAM manufacturers in 1Q22 is expected to be narrow, but since SK hynix had a relatively high base period of shipment in the 4Q21, the company expects a decline in its shipments slightly higher than the industry average which will reduce its 1Q22 market share slightly.

In terms of profit performance, the operating profit margins of Samsung, SK hynix, and Micron (September-November financial reporting) fell to 50%, 45%, and 41%, respectively, due to the cost optimization resulting from an increase in the proportion of advanced processes not being  enough to make up for the decline in price quotations. TrendForce believes that the downturn trend in profit margins is likely to intensify in 1Q22 and DRAM suppliers will face sharper profit decline. Manufacturers can only increase the proportion of advanced processes and optimize their product portfolio to reduce the impact brought on by price pressure.

Specialty DRAM market conditions also weak in 4Q21, with Taiwanese manufacturer revenue falling as well

As the demand for specialty DRAM end-user applications such as TVs and consumer electronics products dropped significantly in 4Q21, coupled with the impact of material shortages in the supply chain, client demand for DRAM shipments also cooled substantially. The 4Q21 specialty DRAM price decline was also comparable to that of mainstream products, in turn impacting the revenue performance of Taiwanese manufacturers focused mainly on the consumer market. From the perspective of Nanya Tech, the combination of falling volume and price reduced its revenue in 4Q21 by approximately 10%, while its operating profit rate fell to 37.5% due to the decline in price quotations. Winbond’s small-capacity (1/2Gb) market was also affected by components mismatch issues, but the impact was relatively small and its 4Q21 revenue fell slightly by close to 4%. PSMC’s (revenue calculation is primarily based on its self-produced standard DRAM products and does not include its DRAM foundry business) revenue fell slightly by approximately 1%. If its foundry revenue is added, then its revenue grew by 6%, reversing a downward trend. This demonstrates that locking-in long-term contracts early is a good strategy.

Faced with reversal in the DRAM market, it is TrendForce’s understanding that the solutions of the three major Taiwanese manufacturers are as follows: Nanya Tech can allocate 20nm production capacity to produce DDR3 (better gross profit) when DDR4 market conditions are poor and invest more resources in the research and development of new 1X nm processes.  If yield improves rapidly, this will provide some contribution before the completion of its new factory in 2024. In addition to continuing to focus on niche small-capacity products, Winbond is also strengthening research and development of 25 nm and next-generation 20 nm products, expected to be introduced directly when its Kaohsiung Lujhu factory starts mass production. As for PSMC, by locking clients into long-term contracts, it can plan 2022 production in advance and continue to maximize its greatest advantages. In accordance with market conditions and gross profit levels, it will allocate production capacity between logic IC and memory products.

2022-02-10

NAND Flash Pricing Set to Spike 5-10% in Q2 Due to Material Contamination at WDC and Kioxia, Says TrendForce

WDC recently stated that certain materials were contaminated in late January at NAND Flash production lines in Yokkaichi and Kitakami, Japan which are joint ventures with Kioxia, according to TrendForce’s investigations. Before this incident, TrendForce had forecast that the NAND Flash market will see a slight oversupply the entire year and average price from Q1 to Q2 will face downward pressure. However, the impact of WDC’s material contamination issue is significant and Samsung’s experience during the previous lockdown of Xi’an due to the pandemic has also retarded the magnitude of the NAND Flash price slump.  Therefore, the Q1 price drop will diminish to 5~10%. In addition, according to TrendForce, the combined WDC/Kioxia NAND Flash market share in the 3Q21 was as high as 32.5%. The consequences of this latest incident may push the price of NAND Flash in Q2 to spike 5~10%.

The contaminated products in this incident are concentrated in 3D NAND (BICS) with an initial estimate of 6.5exabytes (approximately 6,500M GB) affected. According to TrendForce, damaged bits account for 13% of the group’s output in 1Q22 and approximately 3% of the total output for the year. The normal production schedule for the entire line has yet to be confirmed. It is worth noting that the damages announced by WDC likely do not account for total losses stemming for this event and the number of damaged Kioxia parts has not been aggregated, so the total number of affected bits may increase further.

Production primarily focused on Client SSD and eMMC, subsequent spot pricing may climb

Currently, WDC and Kioxia are focused on supplying PC client SSD and eMMC products. Since WDC is the number two and number one supplier in the client SSD and eMMC markets, respectively, subsequent supply will inevitably be hampered. Therefore, even if production demand for PC OEM is revised downward in Q2, client SSD prices may remain resistant to decline. In terms of enterprise SSD, Kioxia PCIe 4.0 has been verified by a number of customers and the company’s market share in 2022 was originally forecast to increase. However, this incident will impact Kioxia’s ability to ship product and further affect subsequent customer procurement. Therefore, in order for buyers to satisfy their own production requirements, a Q2 decline in enterprise SSD product pricing will be largely restrained.

In addition, as buyers and sellers in the spot market are still clarifying events and incident assessments, they mostly responded by suspending quotations, with no new quotations having been generated. However, TrendForce’s assessment indicates that subsequent events will obviously stimulate spot price appreciation. Judging from contract pricing, any orders negotiated on a whole quarter basis should be unaffected in the near-term but there may be an immediate price increase in wafer quotations this February and March.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

2022-01-24

Price Drop of NAND Flash Products for 1Q22 Expected to Taper to 8-13% QoQ Decline, Says TrendForce

NAND Flash prices for 1Q22 are expected to decline by 8-13% QoQ, compared to TrendForce’s previous forecast of 10-15% QoQ, primarily due to PC OEMs’ increased orders for PCIe 3.0 products and the impact of the lockdown in Xi’an on PC OEMs’ price negotiation approaches. To mitigate potential risks in logistics, NAND Flash buyers are now more willing to accept a narrower decline in contract prices in order to obtain their products sooner. However, as the Xi’an lockdown has not noticeably affected the local fabs’ manufacturing operations, the movement of NAND Flash contract prices going forward will likely remain relatively unaffected by the lockdown.

In addition, TrendForce finds that the daily number of new COVID-19 cases in Xi’an has recently undergone a noticeable drop, and the local government has also announced that that the emergency level has been downgraded. As such, Samsung’s and Micron’s local production facilities are returning to normal with respect to workforce and operational capacity. Samsung’s local production base manufactures NAND Flash products, whereas Micron’s local production base is responsible for the testing and packaging of DRAM chips as well as the assembly of DRAM modules. The impacts of the lockdown mainly relate to delays in the deliveries of memory products to customers. On the other hand, the event has not caused a tangible loss in memory production.

Lockdown in Xi’an has not caused a notable rise in NAND Flash spot prices because most spot buyers already carry a high level of inventory

Regarding NAND Flash spot prices, suppliers temporarily suspended quote offering immediately after the event due to concerns about the fallout. As a result, the general decline in NAND Flash spot prices has more or less come to a halt. However, there has been no accompanying signs of spot buyers rushing to procure more products, and the overall transaction volume remains fairly low. TrendForce’s latest survey of the spot market finds that buyers still have plenty of stock on hand and are not in a hurry to procure NAND Flash products at the prices that are currently being offered.

Decline in client SSD and UFS prices for 1Q22 is expected to narrow

Regarding the contract prices of major NAND Flash products, their overall decline has been narrower than previously expected. For instance, despite the weakening demand for Chromebooks, notebook production on the whole has been improving as component gaps become gradually resolved, while demand for commercial notebooks also provides some upward momentum for the overall shipment of notebook computers. As a result, the QoQ decline in notebook shipment for 1Q22 has been narrower compared to prior first quarters. Furthermore, lower-than-expected shipment of Intel’s latest Alder Lake CPUs, which support PCIe 4.0 interface, has led certain PC OEMs to ramp up their orders for PCIe 3.0 SSDs in order to meet their PC shipment targets for 1Q22. However, SSD suppliers have already begun gradually transitioning their material preparation to PCIe 4.0 SSD instead, thereby creating a gap between the supply and demand of PCIe 3.0 SSDs. As well, the Xi’an lockdown has prompted client SSD buyers to scramble to lock in their required delivery volumes. Taken together, these factors have lessened the decline in client SSD prices for 1Q22 from the previous 5-10% QoQ to 3-8% QoQ.

Regarding smartphones, not only has demand remained relatively sluggish, but smartphone brands are also still holding a relatively high level of eMMC/UFS inventory, meaning these brands are not particularly willing to negotiate prices for high volumes of mobile NAND Flash storage at the moment. On the other hand, thanks to increased orders from PC OEMs since November 2021, NAND Flash suppliers’ inventory levels have fallen somewhat. Hence, the decline in mobile NAND Flash storage quotes has in turn narrowed slightly. Contract prices of UFS products are now expected to decrease by 5-10% QoQ in 1Q22 instead of 8-13% QoQ as previously expected. Finally, contract prices of server SSD and NAND Flash wafers are expected to decline by 3-8% QoQ and 10-15% QoQ, respectively, in 1Q22, in line with prior expectations.

2022-01-10

Impact of Components Shortage on Whole Device Shipments Continues, PCs and Notebooks Least Affected, Says TrendForce

Driven by forces such as the pandemic, geopolitics, and the digital transformation of everyday life, there has been a shortage of global foundry production capacity for nearly two years and shortages have been especially severe for mature 1Xnm~180nm nodes, according to TrendForce’s investigations. Although all foundries are furiously increasing capital expenditures to expand capacity, unrealized future expansion does not ease existing supply issues. In addition, the uneven distribution of supply chain resources that has exacerbated the shortage of parts and components has yet to be definitively alleviated. Circumstances as a whole will continue affecting shipments of related whole devices. Only the PC category is expected to emerge largely unscathed in 1Q22.

Moving into 1Q22, TrendForce states, due to the limited increase in production capacity, the market’s supply situation is expected to be approximately the same as in 4Q21. However, some end products have entered their traditional off-season cycle and the slowdown in demand momentum is expected to alleviate the immediate pressure on OEMs and ODMs regarding supply chain stocking.

In terms of the whole servers, the FPGA delivery cycle is currently at over 50 weeks at most, while the delivery cycle of Lan chips has improved significantly, from the original 50+ weeks to approximately 40 weeks. However, escalating purchase order activity caused by the uncertainty of the pandemic combined with an accumulated backlog of demand (Back order/backlog) have pushed the SMT capacity of ODMs to full load in general. The aforementioned phenomenon have not only accelerated the consumption of ICs such as FPGA and PMIC, but the demand for additional purchase orders of FPGA, PMIC and MOSFET is still compelling. The overall market remains tight and the production of server motherboards in the future may face hidden issues. TrendForce has ascertained a more crucial matter. Taking the L6 server as an example, its production scale in 1Q22 will be roughly the same as the previous quarter. However, whole server shipments will show a seasonal decline with a decrease of approximately 8% QoQ.

In terms of mobile phones, material shortages have gradually eased from the second half of 2021 partly due to the discretionary adjustment of mobile phone specifications. Mobile phone brands can adjust their specifications and configurations based on available materials. Currently, the supply of four components remains relatively tight. Among them, 4G SoC (30-40 weeks) and OLED DDIC/Touch IC (20-22 weeks) have a significant impact on the market. The former will affect brands that focus on selling 4G mobile phones. The latter is affected by oligopolistic market structure and the adjustment of foundry capacity. Thus, there are rumblings of insufficient supply. Though the supply of the remaining two items, PMIC and A+G Sensor, remains tight, material shortage risk can be largely mitigated through alternative material replacements or the adjustment of specifications and configurations. In terms of production, the 1Q22 supply chain will essentially carry on its performance from the previous quarter. However, due to disappointing holiday demand at the end of 2021, mobile phone brands must adjust the distributed inventory level of finished products in a timely manner. Combined with uncertainty caused by disruptions stemming from a winter-time pandemic, 1Q22 production performance is estimated to fall by approximately 13% QoQ.

In terms of PCs and laptops, starting from November 2021, material shortages have been partially alleviated. Therefore, the shipment volume of PC ODMs in 4Q21 has been revised upwards. Compared with mobile phones and whole servers, the impact of under/oversupply of materials on end PCs and notebooks is relatively minor. Except for the SSD PCIe 3.0 controller, current tightness exhibited in component supply is due to delays in the transition of Intel’s new platform. This temporary shortfall has led to a delivery cycle of approximately 8-12 weeks while any tightness in the supply of Type C IC, WiFi, and PMIC is gradually abating. TrendForce expects that, as overall supply chain stability recuperates, notebook shipments from ODM brands in 1Q22 will only decrease by 5.1% QoQ. However, if the component shortage factor is discounted, subsequent sales originating from various distribution channels will be another major variable TrendForce must consider.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

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