Market analysis firm TrendForce has revised its NAND pricing expectations for 3Q2022 - and it might be a boon to consumers. As the NAND oversupply seemingly hits harder than previously projected, pricing for client NAND-based products looks poised to drop by 8-13%, compared to the 3-8% that was previously expected. The balance between supply and demand is thus deteriorating faster than expected. According to TrendForce, am inordinately slow 2H22 peak season for consumer electronics including notebooks, TVs, and smartphones is to blame.
TrendForce aligns the steeper price drop with a more disappointing 2Q, which saw continued lagging demand alongside the rolling innovation in NAND Flash output and process design. Uptake in manufacturing of 176-layer, client-focussed QLC SSDs and YMTC's planned market volume expansion have also increased price competition between manufacturers, forcing them to increase price concessions to incentivize clients towards increasing order volumes.
One has to remember that the broader economic downturn, decades-high inflation, and continued hikes in interest rates have likely driven consumers away from "expendable" necessities such as smartphone and TV upgrades and has impacted the general PC market as well, which is expected to shrink by 8.2% during the course of 2022.
As for notebooks, the most enthusiastic technology users would have already upgraded in the wake of the COVID-19 lockdowns. While those memories may now be slipping away in our collective minds, notebooks and consumer electronics purchased during the start and peak pandemic days are still likely going strong in delivering the required computing experiences, pushing away the need for further investments.
NAND-based products material inventory levels continue to rise due to the lower demand, and have now become elements of risk for the supply chain (let's not forget that filled warehouses also incur in losses). Due to slow destocking among distributors and a conservative stocking approach among clients, inventory problems have bubbled over upstream onto the manufacturing space as well.
As a result, system integrators have had to reduce their 3Q orders so as to digest rising inventory levels from unsold materials harking back to 1Q purchases.
|Row 0 - Cell 0||Revised Forecast||Original Forecast|
|3D NAND Wafers (TLC & QLC)||- 15-20%||- 5~10%|
|Client SSD||- 8~13%||- 3~8%|
|Enterprise SSD||- 5~10%||- 0~5%|
|eMMC, UFS||- 8~13%||- 3~8%|
|Total NAND Flash||- 8~13%||- 3~8%|
Enterprise-focussed SSDs too are seeing declines, as the overall economic recession has slowed down whole-device acquisitions in all but the most powerful High Performance Computing (HPC) environments. Despite macroeconomic indicators, no-one wants to be left behind in the supercomputing race towards the Exaflop Frontier, which has seen significantly increased investments across the world, with Europe, the US and China leading the pack through their own distinct approaches.
This leads TrendForce to believe Enterprise SSD market pricing will decline 5~10% in the 3Q.
eMMC products, which typically dominate IoT and budget consumer electronics devices, will be following the client-level oversupply trend, which might ultimately lead to a comparable 8~13% price reduction. The same is true for UFS-based products, such as smartphones, memory cards and USB drives.
Despite the shrinking uptake on the NAND-powered product space, it seems like storage n general is experiencing a particular crunch, as the HDD sector too saw drops in demand that reached the 33% mark year-over-year.
Consumers that can either hold their purchase options or extend their budgets in order to acquire some of the best SSDs - whether for their personal computers, as external storage devices, or extenders for the latest-generation consoles - might do well in timing their purchase for 3Q.