DRAMeXchange: NAND Flash Oversupply Could Lead To Q1 2018 Price Drops

Samsung eUFS
NAND flash helps to make our [electronic] world go 'round and 'round. NAND flash is used in everything from our smartphones to our tablets to our notebook computers to numerous IoT devices that float in and out of our everyday lives. For the past year, demand has outstripped supply with regards to NAND flash, which has resulted in higher prices.

However, DRAMeXchange is forecasting that that trajectory is set to change during the first quarter of 2018. The fourth quarter is traditionally the hottest selling period in tech, while the first quarter is traditionally one of the slowest periods. Thanks to increased production and the seasonal downturn, DRAMeXchange estimates that overall demand will fall by 15 percent in Q1 2018 compared to Q4 2017. The one caveat is that demand in the server market is expected to remain relatively flat.

An oversupply of NAND flash in the market means that contract prices for SSDs and related products are expected to drop during Q1, which could get good news for those looking to get a high-capacity SSD in the coming months.

nand demand

Throughout 2017, manufacturers have been struggling to meet surging demand. The switch from 2D-NAND to 3D-NAND also proved to be a hindrance to flash production earlier in the year, which exacerbated price hikes. Demand in the tablet and notebook markets increased, while server demand especially put a strain on supplies. DRAMeXchange notes that the launch of the iPhone 8, iPhone 8 Plus and iPhone X (all of which can be had in capacities up to 256GB) along with SSD demand in the PC sector further applied pressure.

"Together with 3D-NAND’s continuous capacity expansion, the supply will eventually meet up to the demand, thus achieving market balance and resulting in stable or slightly higher contract prices," writes TrendForce. "DRAMeXchange expects the NAND Flash to experience another round of oversupply, leading to end-products’ lower prices and OEM’s higher intention to use more advanced products such as UFS and SSD with PCIe interface."

It should be noted, however, that NAND flash demand will once again being to outstrip supply during the second half of 2018.