Demand for Consumer Electronics Sluggish, NAND Flash Wafer Pricing Leads Downturn in May
May 16, 2022 | TrendForceEstimated reading time: 2 minutes
According to TrendForce research, looking at NAND Flash wafers, the pricing of which more sensitively reflects the market, suppliers are increasingly motivated to cut prices in exchange for sales due to weak retail demand since March and a more conservative outlook for shipments of other end products. The price of NAND Flash wafers is expected to begin falling in May and the supply of NAND Flash will gradually overtake demand in 2H22. The price decline of NAND Flash wafers in 3Q22 may reach 5~10%.
At the same time, TrendForce indicates that February’s contamination incident at Kioxia was expected to tighten the market in 2Q22 and 3Q22. However, as a consequence of rising inflation and the war between Russia and Ukraine, market demand for consumer products in the traditional peak season of the second half of the year is trending conservative and the prices of client SSD, eMMC, and UFS in 3Q22 will be flat compared to 2Q22, breaking from the original expectation that prices may rise. In terms of enterprise SSDs, as demand for data centers remains strong, no significant correction in demand has yet been observed. However, as the overall NAND Flash market gradually moves into oversupply, prices will only grow slightly by approximately 0~5% in 3Q22.
Weakening demand in a period of unabated production expansion, NAND Flash may face oversupply in 2H22
From the perspective of demand, due to the war between Russia and Ukraine, rising inflation, and the pandemic in China, overall demand for consumer electronics is weak. Demand for Chromebooks dwindled rapidly at the beginning of 2022 as exogenous demand from the pandemic disappeared. In terms of conventional notebooks, the situation with commercial models and consumer models present a divergence. Demand for commercial notebooks is benefiting from a return to the office occurring in many countries, while the opposite is true for consumer notebooks. Therefore, overall demand for notebooks in 2022 will be lower compared to demand in 2021. In terms of smart phones, the production volume of Chinese brands has been suppressed due to China’s flailing against the pandemic and government lockdowns stemming from a continued insistence on a dynamic zero-COVID policy, resulting in continuous downward revisions of global smart phone production for 2022.
In terms of supply, Samsung is focusing on substantial future growth in the enterprise SSD sector and continues to maintain its original capacity expansion plan, especially after its NAND production line was derailed due to the Xi'an lockdown at the end of last year. In order to stabilize future plant operations, the capacity of its P2L fab in South Korea continues to increase. Yangtze Memory Technologies (YMTC) will also expand its wafer input plan in 2H22. Since the 128L yield rate has reached the company's goal and it had successfully broken into the tier 1 smartphone supply chain in 1H22, YMTC will also accelerate production at its second factory in Wuhan. Therefore, TrendForce indicates, since an overall weakness in demand will linger in 2022 yet certain manufacturers will maintain a pattern of expanding production, the NAND Flash market will face oversupply in 2H22. As mentioned above, the prices of various products will be flat or experience reduced growth in 3Q22.
Suggested Items
Commercial Demand Continues to Be the Main Driver of Personal Computing Device Shipments into the GCC Region
03/26/2024 | IDCThe Gulf Cooperation Council (GCC) personal computing device (PCD) market, which is made up of desktops, notebooks, and workstations, declined 4.0% year on year in 2023, with high inventory levels and reduced consumer spending the primary causes.
Suppliers Aim to Raise Contract Prices, But With Uncertain Demand, 2Q24 DRAM Price Increase Expected to Narrow to 3–8%
03/26/2024 | TrendForceTrendForce’s latest report reveals that despite DRAM suppliers’ efforts to trim inventories, they have yet to reach healthy ranges. As they continue to improve their lose situations by boosting capacity utilization rates, the overall demand outlook for this year remains tepid.
LPKF Reports Strategic Successes and Narrowly Achieves Forecast for 2023 Financial Year
03/26/2024 | LPKFLPKF Laser & Electronics SE generated revenue of EUR 124.3 million in the financial year (previous year: EUR 123.7 million) and earnings before interest and tax (EBIT) of EUR 3.7 million (previous year: EUR 6.8 million), putting the EBIT margin at 3.0% (previous year: 5.5%).
Arlon EMD and EMC Announce Expansion in California
03/25/2024 | Arlon EMDArlon EMD, a division of Elite Materials Company (EMC), announces a factory expansion at the Rancho Cucamonga, CA location. Arlon is a global leader in high performance thermoset substrates for mission critical printed circuit boards manufactured for high endurance and long-life programs. Arlon has a 45-year history of manufacturing specialty materials for the Aerospace, Industrial and Military (AIM) markets.
Intraratio Enhances MES + Yield / IoT Management with New Advanced Manufacturing Analytics
03/22/2024 | IntraratioIntraratio announced AICard, which harnesses the power of artificial intelligence and machine learning to empower manufacturers to make informed decisions quickly and accurately regarding product quality and manufacturing line performance and optimization.