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NAND flash pricing will continue to drop due to ‘oversupply’

NAND FLASH PRICING will continue to drop during the second half of 2018, according to analysts.

DRAMeXchange, a division of analyst outfit TrendForce, announced that the average selling price of NAND Flash will dip by around 10 per cent the third and fourth quarters of 2018, despite usually encompassing the traditional peak season for the sales of consumer electronics.

This is due to the growth of the end market demand being weaker than anticipated, said DRAMeXchange, which also revealed that – at the same time – the supply of 3D NAND Flash continues to expand.

DRAMeXchange pointed out that the main reason behind the falling prices is oversupply at various levels.

“First, the annual shipments for smartphones this year are expected to be just on par with last year’s. The replacement demand for smartphones has been sluggish due to the lack of differentiation among products in terms of hardware specifications,” the analysts said.

“Second, notebook shipments were very strong in [the first half of this year], so the seasonal shipment growth for notebooks in [the second half] will be lacklustre compared with the growth in the year’s first half as the base period.”

The company also noted a third reason: the competition is very intense in the server SSD market.

“Although demand for server systems is growing steadily, there is an oversupply of server SSDs because too many suppliers are engaging in this profitable segment,” it added.

NAND flash suppliers have also raised their output forecasts as they have expanded their production capacity and improved the yield rates of their 64/72-layer 3D-NAND production. Given the above factors that have led to a persistent oversupply, DRAMeXchange believes the contract prices of various NAND Flash products will remain weak through the second half of this year.

And since the market outlook for the second half of this year has become more certain, DRAMeXchange anticipates continuing price decline during the traditional slow season of the first half of next year.

“Because of the seasonal headwinds, shipment forecasts for smartphones, notebooks and tablets are fairly conservative for the first half of next year,” the company said. µ

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Source : Inquirer

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