The market turns to oversupply, and the price of NAND Flash is expected to fall by about 10~15% in the first quarter of 2022

According to TrendForce, a research conducted by TrendForce, as the peak season stocking of major smartphone brand factories ends, and ODM will welcome the New Year holiday, the first quarter of 2022 will obviously usher in the off-season demand adjustment, and the market will maintain an oversupply phenomenon, and prices will increase. Continuous correction. However, since early November 2021, PC OEMs have resumed some client SSD orders based on the improvement of upstream semiconductor material supply, helping suppliers to maintain inventory at a low level, making the pressure of suppliers to lower prices and sell is not as strong as expected. Therefore, it is estimated that the price of NAND Flash will fall by 10-15% in the first quarter of next year, and this should be the most obvious quarter of the year.

TrendForce further stated that looking at the price trend of NAND Flash in 2021, the original manufacturers are actively shifting to higher-level output, and the increase in supply bits is significantly better than the demand. However, due to tight supply of main control ICs and components PMICs, NAND is suppressed. Flash terminal capacity output, and the decline in SSD contract prices converged from original expectations. However, as the supply of related parts and components continues to improve in 2022, the NAND Flash market has continued to significantly oversupply since the beginning of next year. Therefore, the price of NAND Flash will continue to show a downward trend before the peak season of the third quarter of next year.

The price decline continues, with Client SSD falling by about 5~10%

PC brand makers sprinted for shipments in the fourth quarter, coupled with strong demand for business laptops, resulting in better-than-expected performance in overall laptop production, and the total volume was roughly the same as in the third quarter. Looking ahead to the first quarter of next year, due to the slowdown in demand for consumer and educational laptops, it will further cause customers to purchase client SSDs more conservatively. Suppliers continue to shift their focus to products with 128 layers and above. In order to reduce the output of higher layers, the original factory has accelerated the launch of a new generation of SSD products to compete for the market. The average client SSD capacity will grow to 567GB in 2022, and WD will join Intel , Micron suppliers launched QLC products, intensifying price competition. Therefore, the decline in client SSD contract prices in the first quarter of next year will continue, about 5-10%.

Enterprise SSD PCIe interface dropped by about 3~8%, SATA interface SSD prices should be roughly the same

Due to the impact of long and short materials on production capacity in North America`s ultra-large-scale data center inventory levels, inventory levels in the fourth quarter have slowed. However, there should still be doubts about the material conditions in the first quarter of next year, resulting in server shipments from the fourth quarter of this year to the first next year. There has been a decline from quarter to quarter, which has concomitantly suppressed the growth of demand. The supply of Enterprise SSDs is gradually improved due to insufficient PMIC capacity. Coupled with the impact of a slight reduction in orders due to the emphasis on destocking in ultra-large data centers, the production capacity of PCIe interface products has become normal, and bargaining with the original factory has begun to emerge; As for SATA interface products, due to the nature of its older interfaces and lower capacity of the matching products, manufacturers prefer to supply high-capacity PCIe SSD products. This has resulted in relatively tight supply of SATA SSDs and made contract prices difficult to drop. Therefore, it is estimated that the price of enterprise SSD in the first quarter of next year will fall by 3~8%, of which SATA contract price will be roughly flat; PCIe will fall by 3~8%.

Consumer electronics production decreases, eMMC will drop by 5~10% quarterly

After the US government subsidies and bids for major consumer products, including TVs and Chromebooks, have ended, demand will slow down significantly in the second half of 2021, and it is expected to return to the previous off-peak season cycle in 2022. According to current estimates, Chromebook production will pick up slightly in the first quarter of next year, and will reach a peak in the second quarter of the traditional cycle. However, in terms of annual performance, it is still in decline, plus TV production in the first quarter of next year. Decrease, so the overall eMMC demand is relatively weak. On the supply side, low-capacity 2D NAND-related production capacity remains stable. Although some suppliers have maintained reductions in 2D production capacity, the rate of downgrading is not as positive as in the past. The current price revision is a response to the fall from the peak in the second quarter of 2021. In the process, it is estimated that the price of eMMC in the first quarter of next year will fall by another 5-10%.

With supply growth and demand slowing, UFS prices fall by 8~13% quarterly

The problem of upstream long and short materials is still serious, which continues to affect the production capacity of smartphone brand factories; although the second half of 2021 is the traditional peak season for shipments, the annual production growth rate has been revised lower than originally expected. Looking forward to the first quarter of next year, it is expected that Apple's stocking momentum will also drop significantly, which is not conducive to the supplier's bit shipment performance, making the overall mobile category demand even weaker. At present, the mainstream shipments of suppliers have mostly entered the 1XX layer, and will gradually introduce 1YY layer products in the second half of 2022; Micron has directly moved over the 128 layer to 176 layer to connect the 96 layer application. With the continuous increase in the number of layers, Supplier`s cost improvement and continuous increase in output bits. As supply continues to grow and demand is in the off-season, the oversupply situation in the first quarter of next year will expand. It is estimated that the price decline of UFS products will expand to 8~13%.

Oversupply expands further, NAND Flash Wafer price drops 10~15% quarterly

The demand for UFD and memory card products at the retail end will be weak throughout 2021. Even though there are e-commerce promotions at the end of the year and traditional festival peak seasons, only a small amount of demand is expected. It is estimated that there will be no active purchase demand before the New Year holiday. . In addition, due to the enthusiastic performance of the cryptocurrency market, the supply of graphic cards required for mining is in short supply, and it is difficult for users to build their own PCs. This has also led to the sluggish performance of retail client SSDs throughout the year, further making it difficult to sell wafers. Based on the trend of other types of product applications, it is expected that suppliers will have to expand their shipments to the NAND Flash wafer market to curb inventory growth. As the smartphone market shipments are further constricted, even though PC and server demand is still supported, the problem of oversupply will continue to expand. It is estimated that the price of 3D NAND wafers will fall again by 10-15% in the first quarter of next year. It is still the best of all items. It is worth noting that the continuously widening gap between supply and demand has caused significant inventory pressures on some suppliers. If the "dumping" phenomenon occurs early to the end of 2021, it will help the decline in the first quarter of next year to be relatively moderate.