According to research by TrendForce, due to suppliers strictly controlling output, the contract prices of NAND Flash will rise comprehensively in the fourth quarter, with an increase of about 8~13%.
The price increase of 813% exceeded previous expectations. TrendForce’s report on September 11 predicted that the average price of NAND Flash in the fourth quarter would remain stable or rise slightly, with a sequential increase of about 05%.
The price increase of NAND Flash wafers is expected to lead the pack. TrendForce predicts its increase for the fourth quarter to be around 13~18%. The effectiveness of the suppliers’ production cuts is the primary reason for this price surge — following Samsung’s decision to expand its production cut to 50%, other NAND Flash wafer manufacturers also maintained a restrained wafer-in strategy. Some processes and production capacities, half a year after the cut, have led to a structural supply shortage. This situation benefits manufacturers in dominating pricing, with almost no low-priced stock currently available in the market.
Comprehensive Price Rise for NAND Flash Q4 Contract Prices
Looking forward to 2024, TrendForce indicates that unless manufacturers continue to implement the production cut strategy, and demand in the server sector for Enterprise SSDs picks up, it will be difficult for NAND Flash prices to maintain their upward trend without demand to back it up.
In contrast to the drastic production cuts on the supply side, the demand for NAND Flash has yet to fully recover. Current new orders are mostly based on price increase expectations, meaning NAND Flash customers choose to stock up in advance.
In general, with the demand visibility for consumer electronics still unclear and the capital expenditure needs of general-purpose servers remaining weak, whether the price increase of NAND Flash can continue into the next year remains an unknown.