Samsung and Micron are expected to raise their prices, while NAND Flash will continue to raise prices for at least three months
Earlier this month, Western Digital and Kioxia both announced that some OF their NAND production lines had been contaminated, resulting in production losses in the first quarter. Soon after, Western Digital announced price increases for all products, and later, Micron followed suit, announcing price increases for all NAND contracts and spot chips.
It is understood that in this round of price rises, NAND various models of prices have risen, among them, 64Gb 8Gx8 MLC flash contract rose the largest, far higher than 32Gb 4Gx8 MLC flash contract rose, and the price has hit a new high in three years.
Insiders said that in the short term, the new round of price rises has just begun and will last for at least three months.
NAND Flash price increases are back
On February 10, Kaixia and Western Data announced that since late January, part of the business of Japan's Factories in Yokichi and Beiupi have been affected by production line pollution. The contaminated products are mainly 3D NAND (BICS), and it is estimated that 6.5exabyte (about 6500M GB) will be affected. The damaged portion accounted for 13 per cent of the group's capacity in the first quarter and 3 per cent of total annual capacity.
According to wind statistics, the market price of NAND Flash maintained a rising trend in the first half of last year. However, due to the trend of slight oversupply in the market, it was in a declining range in the second half of 2021, but rebounded slightly after the decline at the end of the year.
And this pollution incident, become NAND Flash price turning point. First, Western Digital emailed customers in the consumer market saying it would raise prices across the board for all Flash products in response to a short-term spike in costs.
Micron followed with NAND contract and spot price increases of 17 to 18 percent and more than 25 percent, the highest price increases known to date.
Notably, micron's product line has not been affected at all, and the company stresses that its operations have not been affected by pollution incidents at rival plants, and that its strategy of signing long-term agreements with customers helps keep customers confident about supply in times of industry uncertainty.
Because the contract price is negotiated monthly, micron's price increase is effective almost in real time and is expected to be fully reflected in early March, industry sources said.
"Since the storage market is an oligopoly, Micron immediately followed western Digital's price increase. Although Samsung and SK Hynix have not announced (price increase), the rest of them are likely to follow suit. NAND Flash is completely market-based, and now there is a shortage of stock, so everyone will raise prices together." Private equity researcher said to the author.
As of Feb. 24, 32Gb 4Gx8 MLC was quoted at $2.10, while 64Gb 8Gx8 MLC was quoted at $3.36, according to Wind.
In addition, the price of SOLID-state drives (SSDS) is also on the rise. Recently, the price of 120GB and 240GB SATA SSDS has increased by more than 3 percent.
From jd.com's platform, Kingston's 240GB SSD SSD and Kingston's 480GB SSD SSD are priced at 239 yuan and 369 yuan respectively. Relevant users told the author that this price has risen, more expensive than before and after the Spring Festival.
As for the duration of price increases, the researcher added that supply and demand ultimately determine the price cycle, leading manufacturers will certainly not expand production in the short term, and when downstream demand is really released, prices will go up the cycle.
"According to our calculations, overall demand is up from last year. However, there are many uncontrollable factors this year, so the actual demand may differ from our forecast, and the gap may be very large. "And the way the market works, usually when demand goes down, prices go down, but right now there's a little demand and [NAND chip] prices go up, so it's not a system where demand supports prices entirely." The person in charge of the hard disk manufacturer told the author that the demand for some products may change slowly and may shrink, but the price may not fall.
Domestic manufacturers may take the opportunity to increase market share
Data show that NAND Flash is the second largest memory market segment, with a highly concentrated market pattern. The market share is divided by Samsung, Kaixia, Western Digital, SK Hynix, Intel and Micron, with a total market share of more than 95%.
Western Digital and Kaixia are known to be the world's leading SSD suppliers, and their combined production accounts for about 30 per cent of the entire NAND flash market. The contamination will affect Kaixia's total NAN flash shipments of up to 16 exabytes, or about 10 percent of the total NAND flash consumed in a quarter.
As NAND Flash plays an important role in memory chips, once Japanese enterprises, which occupy an important position in the semiconductor industry, reduce production, there is bound to be the risk of stock shortage. Under the monopoly market, there is no other way but to increase the price of products.
Although the demand for NAND Flash in the domestic market is the second in the world, accounting for more than 31%, up to now, the localization rate is still less than 1%. Although other manufacturers such as Changjiang Storage have gradually entered the global attention since 2019, their market share is still low.
From the current situation, the gap between domestic memory chip manufacturers and international giants is still very obvious, independent supply capacity is still in the early stage of growth, and the vast majority of the domestic market share is still controlled by the giants. Although the manufacturers led by Changjiang Storage have been supported by policies and large funds and developed rapidly in recent years, most products have not yet been replaced, and the domestic market is still heavily dependent on international giants.
In the face of oligopoly, the downstream customers in the domestic market have no bargaining power and have no choice but to passively accept the price rise.
However, according to the author's understanding, Changjiang Storage 128 layer 3D NAND flash products have been successfully mass produced, at present, Changjiang storage 64 layer 3D NAND flash manufacturing yield has also improved to the mature level.
Changjiang Storage, which is on track to increase its monthly production to 100,000 pieces by the first half of 2022, is working to enter China's top brand supply chain and expand its target market to include mobile phone and PC applications.
In addition, Dongchip focuses on small and medium capacity memory chips, which can provide Nand, Nor, Dram and other products at the same time. It is reported that the company's design and mass production of 24nm Nand, 48nm Nor are the most advanced Nand, Nor process in the mainland has been mass production.
In the past two years, more and more hard disk manufacturers began to purchase domestic memory chips. According to the author, the flash memory particle used by Domestic memory module supplier Jiahe Jinwei AN4 PCle4.0 SSD product is Changjiang storage 128 layer 3D TLC NAND.
It also marks the technology gap semiconductor enterprises in China and South Korea from 3, 4, reduced to 2 years, although the international giant will still be insurmountable divide, but with the data and the price of light in the west and the Yangtze river storage, and other enterprises in this year began gradually accelerated, domestic storage chip companies is expected to be with cost-effective chance to increase market share.
