NAND Flash Sales Cratered in Q4 Due to Demand Collapse

This site may earn chapter commissions from the links on this page. Terms of use.

Micron 3D NAND wafer

The late Q4 slowdown in the tech industry has hit a number of disparate sectors. Slowdowns in data center sales tagged Nvidia'due south earnings and dragged downwardly RAM demand. Intel'southward x86 CPU shortage is believed to accept played a function in reduced laptop sales. Apple's iPhone shipment falloff — the visitor isn't disclosing numbers, but we've seen estimates that shipments fell ~12 pct — have impacted its suppliers and TSMC's expected demand for 7nm foundry parts in the first half of the year. Unsurprisingly, so, NAND flash is also having a moment.

Overall NAND revenue cruel xvi.eight percent in Q4 2018 co-ordinate to Trendforce. The decline didn't have a single crusade or precipitating event. The site writes:

[Rising] economic uncertainties caused some server manufacturers to delay restocking or cancel orders, and compelled those upstream in the supply chain to make adjustments to their production lines, damaging their ability to stock up. Furthermore, Apple sales did not meet expectations in the new quarter, and the need to switch phones experienced a decline; laptop demands were impacted by the Intel CPU shortage.

Flake shipments rose xl pct in 2018 and overall industry revenue grew every bit well, upwardly x.9 percent from 2017. But there's a abrupt seasonal slump coming — probable larger than seasonal would typically be — in Q1, with uncertain recovery projected in the 2d half. Samsung saw revenue fall by 28.9 percent in Q4 compared with Q3, but is standing ahead with its plans to ramp a new production facility at Pyeongtaek. Different Samsung, Hynix managed to increase its flake shipments in Q4, but its SSD SEEAMAZON_ET_135 See Amazon ET commerce average selling prices fell by 21 percent, while its NAND flash revenue dropped 13 pct.

427582001550711728

Collectively, Samsung, Toshiba, and Western Digital took the largest hit from these shifts, while Micron was the least impacted. Intel even managed to grow its NAND flash acquirement, quarter-on-quarter.

We're seeing different predictions for what will happen adjacent. DigiTimes predicts that the market place will essentially exist finished with price corrections by the time we're into Q2. According to them, "demand has started picking up at a gradual footstep." TrendForce isn't that cheerful. They write: "major NAND Wink suppliers will exist lowering their prices to retain their market shares. Total NAND Flash acquirement will be dragged down by both falling unit prices and falling need, and go along its turn down."

My own reading of the tea leaves suggests that TrendForce is at to the lowest degree playing things more than cautiously than DigiTimes. That matches the tone of the companies I comprehend, virtually of whom take been conservative in their ain full-year projections. The reasons for this vary depending on which company you investigate, simply the wide strokes are similar. Investors are concerned nearly any potential slowdown in the Chinese economy, the impact of the ongoing US-China trade war, and declining demand for smartphones related to that market place's maturity (I'm breaking that point out separately from the Chinese business organization, though at that place'south definitely overlap between them).

To some extent, a cyclical boom-and-bosom cycle to the memory business is normal. Even if the marketplace for NAND does continue to slide, we used to run into these kinds of concern cycles hit the DRAM business organization on a regular ground. It's too office of why the DRAM business organisation has consolidated down into a handful of players. If you're waiting to see what NAND prices practice, I don't think there'd be any harm in waiting another month or 2 to purchase. If demand is slowly recovering, we should run across some evidence of that in Q1 results without prices spiking support to where they were a year ago. If demand continues to drop, the price of new SSDs is only going to get meliorate.

At present Read: