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Recently, the spot market for NAND Flash chips has seen a rise in active price inquiries for certain products, a movement driven by successful increases in wafer contract prices. TrendForce reports this uptick primarily stems from negotiations in late August between NAND Flash suppliers and key Chinese module makers. These discussions led to a new wafer contract that successfully boosted the price of 512 Gb wafers by approximately 10%.
Other suppliers have also raised prices for their comparable products, signaling a shift in supplier sentiment: they are now less inclined to finalize deals at lower prices. This change has contributed to a short-term surge in the wafer spot market. Nevertheless, whether this surge in procurement is supported by actual end-user demand remains uncertain, as these orders have arisen in reaction to adjustments in supply-side pricing.
Suppliers remain firm on pricing and seek to accelerate bottoming out through production cuts
Beginning in 4Q22, Kioxia and Micron took the lead in production cuts, followed by Samsung in the 2Q23. Therefore, the effects of these cuts will not be fully realized until 2H23. TrendForce reports that Samsung initially reduced its production by 25%, and this figure is expected to increase to 35% by 4Q23. This indicates persistent oversupply pressures in the market. Without proactive interventions from suppliers, achieving a bottoming-out and rebound in NAND Flash-related product prices will be challenging, even if demand modestly recovers in 2H23. Consequently, major NAND Flash suppliers are currently controlling supply by actively reducing production, in a bid to halt further price erosion and prevent prices from hitting new lows.
In light of the recent uptick in NAND Flash wafer prices, module makers such as Kingston and Phison are experiencing increased cost pressures. As a response, there has been a growing trend among these companies to announce their intentions to raise the prices of end products, particularly in the SSD segment. Recently, these suppliers have reverted to official pricing for transactions, ceasing to allow customers to negotiate for lower prices.
TrendForce believes that, as suppliers continue to hold the upper hand in determining the prices for wafers and related NAND Flash products, short-term market price fluctuations are to be expected. Korean suppliers are likely to further cut NAND Flash production in the fourth quarter with the aim of stabilizing prices. However, when contrasted with actual end-user demand, buyers remain cautious—even pessimistic regarding future demand prospects. Consequently, even if purchasing costs are increased, this is unlikely to stimulate a surge in order volume. As such, the sustainability of the current uptrend in wafer spot market prices is still worth observing.
View at TechPowerUp Main Site | Source
Other suppliers have also raised prices for their comparable products, signaling a shift in supplier sentiment: they are now less inclined to finalize deals at lower prices. This change has contributed to a short-term surge in the wafer spot market. Nevertheless, whether this surge in procurement is supported by actual end-user demand remains uncertain, as these orders have arisen in reaction to adjustments in supply-side pricing.
Suppliers remain firm on pricing and seek to accelerate bottoming out through production cuts
Beginning in 4Q22, Kioxia and Micron took the lead in production cuts, followed by Samsung in the 2Q23. Therefore, the effects of these cuts will not be fully realized until 2H23. TrendForce reports that Samsung initially reduced its production by 25%, and this figure is expected to increase to 35% by 4Q23. This indicates persistent oversupply pressures in the market. Without proactive interventions from suppliers, achieving a bottoming-out and rebound in NAND Flash-related product prices will be challenging, even if demand modestly recovers in 2H23. Consequently, major NAND Flash suppliers are currently controlling supply by actively reducing production, in a bid to halt further price erosion and prevent prices from hitting new lows.
In light of the recent uptick in NAND Flash wafer prices, module makers such as Kingston and Phison are experiencing increased cost pressures. As a response, there has been a growing trend among these companies to announce their intentions to raise the prices of end products, particularly in the SSD segment. Recently, these suppliers have reverted to official pricing for transactions, ceasing to allow customers to negotiate for lower prices.
TrendForce believes that, as suppliers continue to hold the upper hand in determining the prices for wafers and related NAND Flash products, short-term market price fluctuations are to be expected. Korean suppliers are likely to further cut NAND Flash production in the fourth quarter with the aim of stabilizing prices. However, when contrasted with actual end-user demand, buyers remain cautious—even pessimistic regarding future demand prospects. Consequently, even if purchasing costs are increased, this is unlikely to stimulate a surge in order volume. As such, the sustainability of the current uptrend in wafer spot market prices is still worth observing.
View at TechPowerUp Main Site | Source
