Sources in Asian memory chipmakers are projecting that NAND flash contract prices will rise by 40% in 2020 due to product ramps and increased demand, according to the Taiwanese publication DigiTimes.
The article, now locked behind a subscription wall, cited sources at Taiwanese memory makers. However, the biggest makers of NAND flash are not Taiwanese, like Samsung, Toshiba, and Micron. This would impact memory cards, USB flash drives, and solid-state drives. It noted the contract price of SSDs had been falling for a few years and only started to rise after production issues reduced NAND output in the second quarter of 2019.
A report from TrendForce/DRAMeXchange, which follows that market, paints a less gloomy picture but still predicts a price increase. It predicts NAND flash wafer contracts will increase in price by 10% in Q1 from Q4 2019, which also saw a 10% price increase in December.
Several factors were cited for the projected rise in prices: data-center buildout, particularly hyperscale clients like Amazon and Google, which buy servers in the millions per quarter; Apple’s upcoming iPhones, which are expected in the first half of the year and one rumor says Apple may ship up to six new models.
There was also a power outage at the Yokkaichi fab in Japan run by Western Digital and Toshiba, which reportedly halted production for a few weeks. There was also a power outage in Korea.
As I read around for more information about NAND price predictions, I noticed there could be further pressure to raise client-side prices as device makers restock. There was also a power failure at a Samsung Electronics factory on December 31 that disrupted production of semiconductors.
But Jim “The Memory Guy” Handy, principal analyst with Objective Analysis, says it’s all overblown, especially the Toshiba reports. “Remember the Toshiba power outage a few months ago that was going to cause a massive shortage? Well THAT never happened! They never EVER cut production! That would drive their cost/unit up, which is like drinking poison for a memory maker,” he told me via email.
“With YMTC coming on line there’s no reason to expect a shortage anytime soon, and without a shortage there’s no reason for prices to increase. Plus, a lot of other makers are ramping new (excess) capacity: Samsung, Kioxia, Intel,” he added.
YMTC is China’s new NAND flash maker, Yangtze River Memory Technology Company. They are sampling, but not yet shipping, 3D NAND. When they come on the market, expect an even further supply of NAND, although it will likely be for Chinese consumption. All the better, that means China doesn’t hoover up the rest of the supply.
DigiTimes has a big hit and miss record. Being in Taiwan they have direct sources and oftentimes get big stories. They also tend to miss spectacularly. The only advice I can give is don’t hold out for bargains, because no one is predicting continued price drops. But don’t do any panic buying, either.