Report: NAND flash product prices to fall 10 to 15 percent in Q1 2021

Micron predicts rebound for chip market in 2019
Image: Micron Technology

TrendForce recently forecast the average selling price of NAND flash products will fall 10 to 15 percent in the first quarter of 2021. The market intelligence firm further predicts pricing for that memory type will experience quarter-over-quarter declines throughout next year.

The firm argues that section of the global electronic components market will contract because of a seasonal decline, supply gluts, and increased vendor competition.

PC SSD NAND Pricing to Tumble 10 to 15 Percent

TrendForce estimates prices of NAND flash used to make personal computer solid-state drives (SSDs) will tumble by 10 to 15 percent next quarter. In fairness, a dip in that segment is not altogether unexpected.

Traditionally, PC manufacturers reduce production in the first three months of the year. Since consumer purchasing tends to spike in the December ending period, it falls in the following quarter. However, 2020 is not a traditional year for many reasons, primarily because of the coronavirus pandemic.

COVID-19 caused a massive downturn in public spending in the early part of 2020 because of regional self-quarantine mandates and employment insecurity. But as lockdowns eased and governments issued stimulus payments went out, a mini shopping boom kicked off.

However, the retail sector experienced a Newtonian shortfall due to that atypical expenditure trend in the holiday season. The U.S. Department of Commerce reported American retail spending declined by 1.1 percent from October. Since original equipment manufacturers (OEMs) stocked up on NAND amid the coronavirus boom, memory module makers will cut their prices in hopes of stimulating sales.

Enterprise SSD NAND Predicted to Fall 10 to 15 Percent

TrendForce also predicts weak demand for NAND used to make enterprise SSDs will prompt a pricing shortfall in Q1 2021. The sector’s downturn began in Q3 2020 when the average selling price stayed flat despite growth in related areas. Like the computer memory segment, the data center segment will likely experience a worse than usual cyclical decline next year.

That part of the electronic components industry is also becoming increasingly competitive. Leading providers Intel and Samsung have recently begun the sampling process for their 128/144L PCIe G4 SSD. Similarly, Kioxia, the world’s third-largest memory manufacturer, is attempting to secure data center certification for its fourth-generation PCIe offerings.

As OEMs vie for market share, enterprise SSD prices will fall, which will impact chipmakers.

Smartphone and Chromebook Sales Help eMMC/UFS NAND Pricing

Finally, TrendForce anticipates prices for NAND products utilized for eMMC and UFS applications will only contract by 5 to 10 percent in the March ending quarter.

The firm partially attributes that development to recent events involving the East Asian smartphone market. The firm expects Oppo, Xiaomi, Honor, and Vivo to ramp up their eMMC and UFS spending in Q1 2021. Because those firms represent a significant share of the Chinese handset sector, their increased buying activity will offset the seasonal decline.

All four of those vendors are increasing their near-term output because of Huawei’s diminished presence in the global smartphone industry.

Due to a recent change in U.S. export policy, the Chinese conglomerate can no longer purchase many semiconductors essential to its smartphone manufacturing. As the firm burning through its inventory, it will no longer be able to launch new handsets sometime in 2021. Oppo, Xiaomi, and Vivo are eager to fill the void the corporation’s market exit will create.

Honor is also interested in capitalizing on Huawei’s sourcing problems, which is ironic considering the conglomerate is its former owner. Last month, the budget handset company was reportedly sold to a private-public consortium for $15.2 billion.

TrendForce states the rising popularity of Chromebooks in the global marketplace will also help stabilize eMMC application NAND pricing. This year, COVID-19 prompted a demand surge for the Google-powered laptops because of their utility as a remote learning solution. The fact that the category of notebook computer is generally cheaper than competing products is driving their increasing traction.

As more U.S. schools adopt a remote learning model in response to the second coronavirus wave, Chromebook demand will remain strong. Unfortunately, that development is not strong enough to buoy the rest of the NAND flash market.


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