NAND Flash Memory Prices Expected to Stop Falling and Begin Rising
According to TrendForce’s forecasts, the decline in NAND flash memory prices may come to a halt by the end of the year. However, achieving this turnaround will require drastic measures from manufacturers. As an example, analysts point to Samsung, which has decided to significantly reduce the production of certain types of NAND flash memory by 50% starting in September, as reported by TrendForce.
Samsung’s focus will shift towards producing NAND flash memory with up to 128 layers while minimizing the production of more multi-layered chips. Other NAND flash memory manufacturers are likely to follow suit in the fourth quarter of this year. As a result, this move could either halt the price decline or even lead to an increase in average NAND flash memory prices by up to 5%. For the third quarter, TrendForce experts predict a 5-10% price drop for NAND.
In the context of shrinking margins in the NAND flash memory market, where prices have almost equaled the cost of production, suppliers have no choice but to significantly reduce production in hopes of stabilizing the market. Memory manufacturers are hopeful that with reduced production, the accumulated NAND memory stocks at customer sites will eventually deplete, leading to increased demand and rising chip prices. However, for this trend to continue into 2024, sustained reductions in production alongside consistent growth in orders for enterprise solid-state drives will be critical.
While the NAND flash memory segment has a more flexible pricing policy compared to the DRAM memory market, demand for NAND memory has steadily declined throughout 2023. This is partly attributed to the significant increase in demand for AI-optimized servers, which are replacing general-purpose systems this year, according to TrendForce.
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