NAND Flash Suppliers Kioxia and WD Achieve nearly 90% Capacity Utilization Rates

In a bid to offset impending NAND Flash price hikes expected to persist into the second quarter, certain suppliers have initiated strategic measures to mitigate losses and streamline costs, aiming for profitability in the current fiscal year.
Nand Flash suppliersAccording to a recent report by TrendForce, industry leaders Kioxia and Western Digital (WD) have spearheaded this initiative since March, significantly boosting their capacity utilization rates to nearly 90 percent, a move not widely mirrored by their competitors.

Leading NAND Flash suppliers are: Micron, SanDisk, Samsung, Intel, Silicon Motion, SK Hynix, Western Digital, Kioxia and Toshiba.

TrendForce highlights the necessity for production escalation to meet the anticipated surge in demand in the latter half of the year, particularly as Kioxia and Western Digital grapple with dwindling inventory levels. The focus of this production increase primarily targets 112-layer and select 2D products. This tactical maneuver not only aims to secure profitability within the fiscal year but is also anticipated to contribute to a projected 10.9 percent rise in the annual NAND Flash industry supply bit growth rate for 2024.

Kioxia Charts Ambitious Course with 218-Layer Capacity Expansion by 2025

Against the backdrop of escalating NAND Flash prices and a gradual depletion of suppliers’ stockpiles, process upgrades have emerged as imperative for sustaining cost competitiveness in 2024. Samsung and Micron have emerged as front-runners in this regard, with their output of 200-layer and above products projected to exceed 40 percent by year-end.

In the case of Kioxia and Western Digital, their production focus for 2024 remains fixated on 112 layers. With the aid of Japanese government subsidies, plans for equipment installation to bolster 218-layer output are slated to commence in the latter half of the year, reflecting a more assertive stance towards 218-layer production in 2025. Kioxia’s strategic roadmap entails a direct transition to 300-layer and beyond processes subsequent to 218 layers, with the aim of achieving a more favorable cost structure and reclaiming technological and cost supremacy.

NAND Flash Demand Bit Growth Underwhelms Amidst Rising Prices

While NAND Flash suppliers are poised to incrementally ramp up production in the latter half of the year, procurement momentum may witness a downturn due to increased inventory levels among PC and smartphone buyers in the initial quarter. Furthermore, the anticipated surge in Enterprise SSD purchases, often a significant driver of NAND Flash demand, has failed to materialize thus far.

Consequently, barring a notable uptick in Enterprise SSD acquisitions, overall NAND Flash demand may fall short of expectations. As a result, TrendForce predicts a gradual deceleration in the rate of NAND Flash contract price increases, projecting a decline to 10–15 percent in the second quarter before tapering off to 0–5 percent in the subsequent quarter.