According to a survey report released by TrendForce on September 1, entering the second half of the third quarter of 2022, the lack of peak seasons led to delays in destocking. Transactions in the NAND flash market have been lukewarm, with buyers on the sidelines, preferring not to negotiate to price. Factory inventory pressure has reached a tipping point and manufacturers are bottoming out to seal deals.
This move will lead to a further drop in manufacturers' pricing. TrendForce once again lowered the contract price of NAND flash wafers in 3Q22, with the estimated price drop expanding from the original estimate of 15-20% to 30-35%.
TrendForce said that in the past two years, the epidemic has promoted digital transformation, and notebook computers and servers have stimulated the rapid growth of NAND flash consumption. To meet demand, manufacturers have been aggressively expanding, accelerating the production of products above 128 layers.
However, the NAND flash market situation deteriorated sharply in the second half of 2022, with sharp adjustments in purchase order demand for smartphones and laptops, indicating an oversupply in the market. Looking forward to 2023, the conservative attitude of various consumer electronics brands may make it difficult for the market to improve next year, stimulating suppliers to step up to seize market share.
If some manufacturers do not cut production, the possibility of another market consolidation will increase. In particular, the number of suppliers has not decreased, and the price of NAND flash memory will fluctuate greatly in the long run. At the same time, some manufacturers may find it difficult to keep up with the pace of technology migration, as the transition to higher-tech production will increase capital expenditures. Therefore, TrendForce believes that this price crash could be the start of a market consolidation.
Looking ahead to NAND flash wafer prices in the fourth quarter, contract and spot market wafer prices face a collapse as manufacturers have implemented strategies to maintain market share at all costs. As a result, TrendForce believes that NAND flash wafer prices could drop by another 20% in Q4 2022, under the shadow of rising inventories and lukewarm demand as the industry tends to negotiate pricing in Q4 and then Q1 , this decline is likely to continue to expand.
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