There will be a 13–18 percent surge in Q2 NAND Flash contract prices, with enterprise Solid State Drives (SSDs) expected to experience the most significant increase.
Despite efforts by major players such as Kioxia and WDC to enhance production capacity utilization rates since Q1, other suppliers have maintained cautious production strategies. The slight dip in Q2 NAND Flash purchasing compared to Q1 hasn’t dampened the overall market momentum, which continues to be driven by dwindling supplier inventories and production cuts, TrendForce said.
The demand for eMMC (embedded MultiMediaCard) is primarily being fueled by smartphone makers from China, leading to a notable increase in shipments from Chinese module makers, as some suppliers have reduced their supply. This has prompted buyers to increasingly turn to solutions from module makers to fulfill their production requirements, thereby boosting the technological advancement of Chinese module factories and their engagement with top-tier clients. Consequently, the penetration of eMMC products among smartphone customers is expected to rise, with Q2 witnessing a projected 10–15 percent increase in eMMC contract prices due to a sharp rebound in NAND Flash wafer prices.
The UFS (Universal Flash Storage) market is buoyed by significant smartphone demand in India and Southeast Asia, contributing to strong order momentum in the second quarter. China-based smartphone suppliers are ramping up their Q2 orders to maintain adequate inventory levels, further driving demand. Suppliers striving to meet their break-even targets swiftly are anticipated to push UFS contract prices up by 10–15 percent in Q2.
In enterprise SSDs business, rising demand from Cloud Service Providers (CSPs) in North America and China is expected to drive purchasing volumes higher in the first half of the year. With low order fill rates for large-capacity SSD orders, suppliers continue to influence price trends, potentially compelling buyers to accept higher prices. As some buyers seek to bolster their inventory levels ahead of the peak season in the second half of 2024, enterprise SSD contract prices are forecasted to surge by 20–25 percent in Q2, marking the steepest increase across all product lines.
Client SSDs are experiencing a cautious buying approach due to the off-season in-end sales, resulting in some PC Original Equipment Manufacturers (OEMs) cutting their 2Q24 orders. The price rebound is likely to restrain order growth in the latter half of the year, with PC client SSD Q2 contract price increases projected to be around 10–15 percent.
Post-Lunar New Year sales for NAND Flash wafers continue to decline as downstream customers refrain from stockpiling. However, the price hike has led suppliers to struggle in meeting orders from Chinese smartphone brands, prompting a shift to module makers.
China-based module makers are maintaining high inventory levels to expand deals with smartphone brands. With manufacturers eager to swiftly achieve profit targets, NAND Flash wafer contract prices are on the rise. The increase is expected to be considerably more moderate than in Q1, estimated at 5–10 percent due to subdued demand in the retail market.
TelecomLead.com News Desk
