The novel coronavirus outbreak has not affected its supply greatly, but industry analysts predict that the weakening of demand may affect the price of NAND flash memory, according to industry analysts.
Novel coronavirus has been on the rise in 2020, but the price of NAND flash has been rising. Some analysts say that the trend may slow and reverse as new coronavirus outbreaks lead to a decline in sales of mobile phone and other devices that use the chip. Others believe that the demand impact is not enough to change the upward trend of NAND flash prices. As a result, enterprise, super large enterprise, server and storage OEM buyers will see inconsistent forecasts when they plan to purchase their flash products.
Don Jeanette, vice president of trendfocus, said: “it’s not clear how stable prices will be this year.”
Jeanette believes that as supply exceeds demand, this year’s coronavirus epidemic may push manufacturers to lower the price of NAND flash. Now that NAND flash prices have soared above Jeanette’s expectations in early 2020, he said the trend seems likely to continue until the “coronavirus effect” takes effect.
Jeanette believes that now, affected by the epidemic, sales of PCs and mobile devices are declining, which may soon become an influential factor and release NAND flash memory. He said more NAND flash will be released in the second half of the year when large and super large enterprises begin to curb their plans to purchase flash and SSD in the first half of the year.
Jim handy, general manager and semiconductor analyst at objective analysis, said he always believed that NAND flash price rise in early 2020 was only temporary. He attributed the price surge to China’s overstocking of inventories, as ultra large companies and other big buyers worried that the trade war would make it difficult for them to buy SSD and DRAM.
“Although prices have not yet fallen, there are good reasons to expect prices to fall,” handy said. Real shortages are unlikely to occur in 2020. The semiconductor capital expenditure in 2018 is quite large, which will drive the overcapacity this year. They didn’t stop spending in 2019 and laid the foundation for oversupply in 2021. “
Handy predicts that NAND flash, SSD and DRAM prices will not rise between 2020 and 2021. Super large scale producers, storage and server providers and their enterprise customers should be able to get whatever they need at a reasonable price, he said.
Different opinions on NAND flash price forecast
But there is no consensus on NAND flash price. According to Joe Unsworth, vice president of research at Gartner, about 1% reduction in demand in 2020 will only slightly reduce NAND flash shortage. He said Gartner still expects shortages this year, causing NAND flash prices to rise by about 10% to 15%, and SSD prices could be higher. Unsworth said the shortage will intensify in the second half of 2020 as the smartphone market recovers, 5g penetration increases and the debut of the next generation of SSD based game consoles.
According to Gartner, China’s NAND flash manufacturing accounts for 16.6% of the total monthly wafer production, led by Samsung and Intel. Gartner said ymtc, a start-up, is still increasing production, when it accounts for less than 2% of the global total.
China’s Wuhan novel coronavirus is the headquarters of the Yangtze Storage Technology Co., Ltd., which is headquartered in Wuhan, China. According to the company’s website, ymtc has more than 4000 employees, including about 2000 engineers in R & D centers in Wuhan, Shanghai, Beijing and other regions.
In view of its location, mtyc must take action to prevent and control the spread of the virus. A spokesman for the company said the measures include distributing masks to employees, strengthening disinfection, delaying the return of foreign workers and encouraging remote work where conditions permit.
In a statement issued in mid February, ymtc claimed that there were no employees infected with the coronavirus in its factory area and that it had taken partition isolation control measures to avoid the introduction of external virus. The company is actively coordinating raw material supply and logistics to ensure the normal operation of the production line.
Greg Wong, founder and chief analyst of forward insights, said that although ymtc was operating normally, it would postpone plans to increase wafer capacity. The delay is due to a lack of foreign technicians to install equipment from manufacturers outside China.
Some SSD vendors see the impact
Wong added that SSD suppliers with factories, third-party assemblers or raw materials in Wuhan, China, are being affected by the outbreak of coronavirus. He said the plant was operating at “low utilization” because of the impact of the epidemic and the slow resumption of staff. Wong warned that once the factory’s existing inventory ran out, it could be in short supply.
In the past 24 hours, 516 new cases of covid-19 have been confirmed in South Korea, bringing the country’s total to 5328, the World Health Organization reported on March 4. China added 120 confirmed cases in the same period. Since the first case was reported on December 31, a total of 80422 cases and 2984 deaths have been confirmed in China.
Intel, kioxia, Meguiar, Samsung, SK Hynix and Western Digital, all of which have operations in Asia, emphasize that their main focus is to ensure the health and safety of their employees. These manufacturers have not yet found any impact on their business, and it is difficult to say whether travel restrictions, logistics problems or any other problems have begun to affect production.
Samsung, the market leader of NAND flash memory market, has a memory production factory in Xi’an, China, and the rest in Korea. A spokesman for the company issued a brief statement yesterday: “for Samsung and its subsidiaries, the epidemic has so far had no impact on our market operations.”
Memory manufacturer provides information update
Intel has an “enterprise wide epidemic leadership group” and a dedicated web page to update communications with suppliers. The update of March 3rd told them that Intel personnel could not enter and leave China, China, Hongkong, Macao, Korea, Japan, Singapore, Italy, Iran, Germany, Spain and France unless otherwise informed. Germany, Spain and France are new additions to the February 27 update.
On February 18, an Intel spokesman said the 3D NAND flash manufacturing base in Dalian, China, “has been started and fully operational,” although the company may encounter “day-to-day problems” in processing new orders. The spokesman said yesterday that Intel’s factory in China is still “continuing to operate”, but he refused to directly answer questions about whether the manufacturing plant in Dalian is still in full operation.
Kioxia said last week that its agreement requires travel only when necessary and that current travel to “tier 2 or above” countries requires executive management approval. Kioxia has a flash memory factory in Japan’s four day market and North.
Meguiar has implemented health check-up measures worldwide and imposed travel restrictions on employees and on-site suppliers. A spokesman for the company said last week that Meguiar’s operations had not been significantly affected, but was still keeping a close eye on the latest developments.
Western data said last week that its factories in China were “continuing to function normally” and that it was working with regional suppliers to mitigate the impact and disruption to customers. Like other suppliers, WD has travel restrictions to China and other Asian countries.
A sk Hynix spokesman said last week: “we have not interrupted production and all our production facilities have been put into operation. We are working on contingency plans just in case. “
Editor in charge: CT