3D NAND's flash memory market over-saturated, with prices dropping by 8-13% in the third quarter

3D NAND's flash memory market over-saturated, with prices dropping by 8-13% in the third quarter

In the second quarter of 2022, the 3D NAND flash memory market was overfilled, which coincided with the extremely low sales of electronics and the corresponding low demand for memory from smartphone, television, and laptop manufacturers. Therefore, the third quarter is expected to see a decrease of 8–13% in the cost of the 3D NAND flash memory.

The consumer demand for laptops and PCs led the OEM manufacturers of these devices to significantly reduce the volume of hardware purchases by the third quarter of this year and to try to sell their stocks from the first half of the year. On the other hand, YMTC started producing and delivering 176 layered flash chips of 3D NAND QLC, thereby increasing competition in the market.

The demand for SSD at the corporate level in the second half of 2022 will be lower than in the first half of 2022, considered by analysts. The main reasons for this are the unstable economic situation in the world, as well as the weak trend in procurement of devices for the third quarter in China due to the unmet demand for components for the new generation ' s server platforms. To encourage sales by SSD suppliers at the corporate level, however, buyers are currently not particularly interested in new purchases. TrendForce experts believe that the prices of these products will drop by 5 to 10 per cent in the third quarter.

The weak demand for chrome-bugs and televisions has reduced the volume of eMMC memory purchases. The manufacturers of devices have become more aware of the size of their storage of components. The eMMC memory producers plan to reduce the volume of these products in the long term to maintain stable prices. In the short term, TrendForce projects a decline in the cost of eMMC memory in the third quarter by 8-13%.

A large Chinese sale of "618" in July did not meet the expectations and demand for Chinese smartphones. Therefore, the demand for a flash memory of UFS has not increased. This is not only the case among Chinese producers. Samsung, the same South Korean company, believes that the demand for UFS memory is unlikely to increase in the near future, so the company predicts a weakening of this market in the second half of 2022. Initially, the producers of this memory did not believe that price reductions could stimulate supply growth and therefore were reluctant to negotiate. Now that the stocks of UFS in warehouses are too large, the price decline seems inevitable. The UFS memory is projected to increase by about 8 to 13% in the third quarter.

It was originally expected that the peak sales season, as well as the lifting of restrictive measures in China, would refresh the market and lead to increased demand for silicon plates for 3D NAND flash memory chips. However, the demand for these products continues to decline and the stock of producers to increase. In the end, they will be forced to lower the price of their services. According to analysts, the cost of silicon plates for 3D NAND flash memory chips will fall by 15-20% in the third quarter.