NAND Shortage Drives Price Surge

Release time:2017-06-02
source:EE Times

Contract pricing for NAND flash memory surged by 20 to 25 percent in the first quarter, a strong testament to the undersupply condition that persists in the market, according to DRAMeXchange, a firm that tracks memory chip pricing.

NAND revenue typically falls off considerably between the seasonally strong fourth quarter and the the first quarter of the year, traditionally a slow season for end device shipments. However, in the first quarter of this year, global NAND revenue declined by just 0.4 percent, as the reduction of two-dimensional NAND capacity was severe enough to create tight demand, DRAMeXchange said.

Prices of mobile storage products such as embedded multi-chip package (eMCP), embedded multi-media card (eMMC) and universal flash storage (UFS) also continue climbing, DRAMeXchange said.

DRAMeXchange expects NAND shortage to persist for the entire year, resulted in expected sequential sales increases for NAND suppliers.

The production capacity of two dimensional NAND has fallen as the industry has begun migrating to 3D NAND manufacturing, said Alan Chen, senior research manager at DRAMeXchange, in a press statement.

"As the market has yet to regain its balance following this disruption, contract prices of NAND flash chips will keep going up," Chen said.

South Korea's Samsung Electronics Co. Ltd. maintained its sizeable lead in the NAND flash market, holding 35.4 percent of the market in the first quarter, despite a 6 percent decline in NAND revenue, according to DRAMeXchange. Western Digital maintained its position as the No. 2 supplier of NAND with about 17.9 percent of the market, according to the firm.

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After a banner year in 2017, the NAND flash market continues to cool significantly in 2018. Analysts say that the shortages of NAND parts that persisted throughout last year have given way to oversupply, resulting in significant price erosion.According to TrendForce, a research firm that tracks memory chip pricing, the average selling price of NAND flash is expected to decline by 10 percent in the third quarter and another 10 percent in the fourth quarter. Noting that the third quarter typically heralds the peak season for consumer electronics sales, the firm says that demand has been weaker than expected. Meanwhile, the supply of 3D NAND flash continues to expand as suppliers improve yield rates and expand capacity.Prices are also expected to continue declining in the first half of next year, which is traditional the slower time of year for electronics sales. Shipment forecasts for smartphones, notebooks and tablets are fairly conservative for the first half of 2019, according to TrendForce.TrendForce blames oversupply at various levels for the persistent price declines. Smartphone shipments are not expected to grow meaningfully if at all this year, according to to the firm, and notebook shipments are expected to be relatively flat in the second half of the year after a strong first half. Competition also continues to be fierce in the server SSD market, which is flooded with product despite strong demand, according to TrendForce.IC Insights — another market research firm — warned last month that NAND flash suppliers are overspending on capacity expansion, contributing to falling prices. While most of the five major NAND suppliers have said they believe that NAND bit volume demand growth will average about 40% per year over the next few years, the industry exceeded the amount of capital spending need to a support a 40% increase by 27% last year and is forecast to exceed the amount needed by another 41% this year."IC Insights believes that the risk for significantly overshooting 3D NAND flash market demand is very high and growing," the firm said in a report.TrendForce noted that Toshiba’s new Fab 6 in the Yokkaichi, Japan, is scheduled to begin production next year. Most suppliers are working to make the transition from the 64/72-layer architecture to the 96-layer, which is expected to increase the overall output and keep the market in oversupply, according to TrendForce.
2018-08-03 00:00 reading:498
The NAND flash market, which enjoyed one of its best years on record in 2017 thanks to strong demand and tight supply, took a step toward equilibrium between supply and demand in the fourth quarter as yield rates improved, with contract pricing for NAND in PCs, tablets and servers remaining flat or declining slightly, according to DRAMeXchange.Coming off the high seasonal demand for NAND in the fourth quarter, the NAND market is currently in a state of slight oversupply, with NAND suppliers likely to see sales suffer as they cut prices on products to spur demand, according to DRAMeXchange, a unit of market research firm TrendForce that tracks memory pricing. The firm said that NAND suppliers can still maintain a healthy level of profit despite the oversupply because costs to produce 64- and 72-layer 3D NAND have also declined.The only types of NAND that showed increasing contract pricing during the fourth quarter were eMMC and Universal Flash Storage (UFS), DRAMeXchange said.  Constrained by limited capacity and early 3D NAND hiccups that impacted supply, sales of NAND flash increased by more than 40 percent last year. However, sales increased only about 7 percent in the fourth quarter compared with the third quarter, the company estimated.South Korea's Samsung Electronics remained the leader in NAND revenue by a wide margin in the fourth quarter, increasing its market share to an estimated 38 percent, up from 37 percent in the third quarter of 2017, according to DRAMeXchange. Much of Samsung's fourth quarter market share growth appears to have come at the expense of Japan's Toshiba, which remained the No. 2 player in NAND despite its market share slipping to 17.1 percent in the fourth quarter from 18 percent in the third quarter of the year, DRAMeXchange said.Western Digital and Micron, the third and fourth ranked players in NAND respectively, also lost market share during the fourth quarter despite growing sales, according to DRAMeXchange. SK Hynix, meanwhile, gained more than a percentage point of market share as the company's NAND sales increased by nearly 20 percent from the third quarter to the fourth quarter of last year, the firm said.
2018-03-07 00:00 reading:415
Average selling prices (ASPs) for NAND flash memory chips rose b 3 to 10 percent in the second quarter and are projected to continue rising through the third quarter, according to DRAMeXchange, a market research firm that tracks memory chip pricing. DRAMeXchange, which is a unit of Taiwan-based TrendForce, said it expects NAND suppliers to post excellent third quarter financial results thanks to slight increases in contract pricing for mobile products like universal flash storage (UFS) and eMMC and solid state drives. A tight supply of memory chips, particularly NAND and DRAM, is lifting the broader semiconductor industry to what is expected to be the best growth year since the recession recovery year of 2010, when chip sales grew by more than 30 percent. Market research firm IC Insights Inc. forecasts that NAND sales will rise 35 percent this year compared with 2016. Last week, the World Semiconductor Trade Statistics (WSTS) organization become the latest semiconductor industry market watcher to revise upward its forecast for 2017 sales, saying it now expects chip sales to grow by 17 percent this year. Alan Chen, senior research manager at DRAMeXchange, said through a statement that suppliers that scaling limitations on planar NAND are pushing suppliers to shift to 3D NAND. This, transition, Chen said, has resulted in a substantial loss in production capacity, leading to tight supply and rising ASPs. "We expect supply to be under strain for the rest of 2017," Chen said. "Relief will come later in 2018, when the manufacturing of 64- and 72-layer 3D-NAND flash reaches maturity."
2017-08-23 00:00 reading:487
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