According to the latest survey by the global market research firm TrendForce, apart from continued investment in server construction by enterprises in the third quarter, Enterprise SSDs particularly benefited from the expanded adoption of AI, continuing to drive orders. However, consumer electronics demand remains sluggish, coupled with a more aggressive production increase by manufacturers in the second half of the year. This has led to an increase in the NAND Flash sufficiency ratio to 2.3%, with the blended price increase narrowing to 5-10% quarter-on-quarter.
Looking at the NAND Flash price trends this year, manufacturers controlling production increases in the first half helped accelerate the rebound in prices, aiding manufacturers in returning to profitability. However, as manufacturers significantly ramped up production in the second half, retail market demand has not recovered, leading to a drop in wafer spot prices. The widening decline has caused some wafer prices to fall more than 20% below contract prices, challenging future price increases for wafer contract prices.
| 2Q24 (E) | 3Q24 (F) | |
| eMMC UFS | Consumer: up 0~5% Mobile: up 10~15% | Consumer: mostly flat Mobile: up 3~8% |
| Enterprise SSD | Up 20~25% | Up 15~20% |
| Client SSD | Up 20~25% | Up 3~8% |
| 3D NAND Wafers (TLC & QLC) | Up 5~10% | Mostly flat |
| Total NAND Flash | Up 15~20% | Up 5~10% |
1. Regarding Client SSDs
Despite entering the traditional peak season for NB sales, customer stocking intentions remain conservative. Especially since PC terminal products have not fully reflected last year’s price increases, procurement volumes in the second half have not significantly grown.
As suppliers begin to upgrade PC client SSD processes to 2XX layers, original manufacturers’ supply capacity continues to rise, but the momentum for price increases is not strong. Additionally, with the clear price difference between QLC and TLC products, more PC buyers are expanding their use of QLC solutions, intensifying price competition. It is expected that price increase space this season will be relatively limited, with PC Client SSD contract prices estimated to increase by 3-8% quarter-on-quarter.
2. Regarding Enterprise SSDs
Many enterprises continue to expand AI server construction, with IT equipment spending significantly recovering. Server OEM orders in the third quarter have notably increased, with procurement demand still higher than the previous quarter. However, due to conservative order demand from smartphones and NBs, the NAND Flash market has shifted towards a more balanced state.
Apart from large-capacity QLC Enterprise SSDs being dominated by two manufacturers, other suppliers are actively competing for Enterprise SSD orders to accelerate capacity reduction in the second half. This has led to a narrowing of the Enterprise SSD contract price increase to 15-20% quarter-on-quarter.
3. Regarding eMMC
The third quarter lacks factors driving demand for eMMC, but manufacturers have maintained a clear stance on price increases. The final price increase is expected to be minimal, with contract prices remaining roughly stable.
4. Regarding UFS
Affected by sufficient inventory levels and slower de-stocking by smartphone OEMs, and with module manufacturers also beginning to supply UFS materials, providing more options for the demand side, resistance to significant price increases by manufacturers in the third quarter is expected. Given sufficient buyer inventory and sluggish market demand, suppliers may concede, with third-quarter UFS contract price increases expected to fall within 3-8% quarter-on-quarter.
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