NAND Flash Market Sees Steep Price Hikes in 1Q24 Amidst Supply-Demand Tug of War

TrendForce research forecasts a tumultuous start for the NAND Flash market in the first quarter of 2024. Despite the seasonal norm of reduced demand, buyers are on a spree to secure their inventories, propelling suppliers into advocating for escalated prices. This dynamic has set the stage for an estimated 15–20 percent surge in NAND Flash contract prices, creating a tense standoff between supply and demand.
Price increase in NAND Flash in Q1 2024The impetus behind this price surge stems from NAND Flash manufacturers aggressively hiking prices to offset losses. However, the market’s ability to sustain these rapid increases hinges significantly on the resurgence of enterprise SSD procurement.

The quarter ahead anticipates diverse production strategies among suppliers, with some gearing up output early, potentially exerting additional pressure if the projected demand growth falls short. This could serve as a moderating factor for price hikes anticipated in the latter half of 2024.

The sectoral analysis reveals distinct patterns across various products within the NAND Flash market:

Client SSDs: PC OEMs are poised to hit a procurement peak in 1Q24, particularly for PCIe 4.0 SSDs, triggering a shift in suppliers’ production strategies. This shift involves substantial upgrades in processes and securing substantial bit orders, resulting in marked price increases for PCIe 4.0 products. Notably, these price hikes are likely to be accepted by notebook clients, setting the stage for an expected 15–20 percent upsurge in PC client SSD contract prices.

Enterprise SSDs: While North American CSPs have yet to trigger a surge in demand, their Chinese counterparts and server brands are filling the void, maintaining an unexpectedly buoyant market for the first quarter. Buyers rushing to bolster their orders and suppliers firmly adhering to pricing strategies are poised to propel enterprise SSD contract prices by approximately 18–23 percent for the quarter.

eMMC: Stabilizing demand from smartphones and Chromebooks in the eMMC sector is reshaping pricing dynamics. Manufacturers and fabs are boldly increasing prices, especially for smaller capacity products, due to persistent production cuts. Consequently, eMMC prices across all capacities and applications are expected to skyrocket, projecting an 18–23 percent contract price hike in 1Q24.

UFS: Manufacturers’ strategic supply throttling and aggressive price hikes have led to severe shortages, particularly for the highly sought-after UFS 4.0 in the smartphone sector. In response, smartphone OEMs are amplifying their orders to ensure robust inventory levels. Despite seller inventory sufficiency, all UFS series products witness price jumps over 30 percent, anticipating an 18–23 percent increase in UFS contract prices for 1Q24, primarily propelled by the smartphone sector.

NAND Flash Wafer: Module makers, responding to a short-term price surge and uncertain demand recovery, are offloading their wafer inventory for profit and cash flow sustenance. Despite manufacturers’ plans to hike prices for profit, the NAND Flash wafer contract prices are only expected to moderately increase by approximately 8–13 percent in 1Q24, with buyer enthusiasm dimming in light of uncertain market recovery.

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