The NAND Flash market is set for a significant shift, as Phison’s CEO, Pua Khein-Seng, predicts a shortage in the coming year. This forecast emerges amid a backdrop of production reductions by major memory chip manufacturers and a revitalising end market, leading to a resurgence in NAND Flash prosperity and price hikes.
During a recent interview, Pua Khein-Seng highlighted that Phison, a NAND Flash control chip manufacturer, has seen a recent surge in shipments. However, the overall market supply is tightening, primarily due to production cuts by leading manufacturers. This tightening, coupled with a recovery in the end market, is setting the stage for a potential shortage of NAND Flash in the near future
Khein-Seng emphasized Phison’s role as a control chip manufacturer, not a memory chip factory, distancing the company from direct influence over the strategies of memory chip manufacturers. Nevertheless, he observed that current NAND Flash prices are at a low, with a clear upward trajectory in demand. This situation suggests a substantial growth in demand could be on the horizon.
Adding complexity to the market dynamics, Samsung, a key player in the NAND Flash memory market, has implemented a substantial production reduction strategy. Since September, Samsung has slashed its NAND Flash memory production by 50% of its total capacity. This strategic move aims at accelerating the destocking process and stabilising NAND Flash prices. Furthermore, Samsung is preparing for a gradual price increase in NAND Flash by mid-2024, with plans to implement a 20% price hike every quarter. This strategy could result in three consecutive 20% increases within two and a half quarters, significantly impacting the market.
The combination of production cuts, recovering market demand, and strategic price adjustments by industry leaders like Samsung is shaping a future where NAND Flash could become more scarce and expensive. The implications of this shift are far-reaching, affecting various sectors reliant on NAND Flash technology, from consumer electronics to enterprise storage solutions. The industry must brace for these changes, which are likely to influence supply chains, pricing strategies, and technology development in the sector.
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