Solid State Drive Prices Could Be On The Rise As NAND Flash Demand Outstrips Supply

If you notice that solid state drives are getting more expensive, blame smartphones, at least in part. Smartphone makers are drying up the supply of NAND flash memory chips and to make matters worse, the transition from 2D NAND to 3D NAND manufacturing is putting added strain on how the overall output of chips. There just isn't a big enough supply to meet demand.

We all know what happens when demand exceeds supply—prices go up. The latest report from market observer DRAMeXchange, a division of TrendForce, notes that the global NAND flash industry grew nearly 20 percent in the third quarter compared to the previous one.

Samsung 960 Pro

"The NAND Flash market outlook for the fourth quarter of 2016 indicates that NAND Flash supply will be under greater strain with the advent of the peak shipment season for end devices," said Sean Yang, research director of DRAMeXchange. "Therefore, contract prices for various NAND Flash products will see larger increases, which in turn will take suppliers’ revenues and operating margins to new highs for this year."

That's all well and good for NAND flash memory suppliers and their bottom lines, but bad for consumers. Multi-level cell (MLC) and triple-level cell (TLC) NAND pricing went up by as much as 10 percent during the third quarter. Whether price continue to rise remains to be seen.

There is reason to be optimistic that things will balance out before long. Toshiba is tapping its newly rebuilt facility Fab 2 in Japan to produce 3D NAND flash memory chips. It's expected to achieve capacity of 40,000 wafers per month by the end of this quarter, and will expand output even more in 2017 when the facility begins mass producing 64-layer 3D NAND flash memory chips. On top of it all, Toshiba is planning a new facility (Fab 6) in February of next year.

Western Digital will also expand its output of NAND flash. It expects to see an increase of 45 percent in 2017. Same goes for Intel—its NAND flash memory fab in Dalian, China, is expected to produce 10,000 wafers per month this quarter with gradual expansion planned for next year.

Via:  TrendForce
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