A real cyclical market, the NAND flash enterprise goes by means of durations of booms and durations of busts. Following a really worthwhile increase 12 months in 2018, it seems just like the market is in a down swing, as an oversupply is beginning to impression the underside strains of reminiscence makers. To stem any potential for important losses or an outright market crash, three main producers of NAND reminiscence — Intel, Micron, and SK Hynix — have introduced that they are going to be taking measures to deal with the oversupply, akin to lowering flash manufacturing, chopping down wafer begins, and/or slowing down ramp ups of recent fabs. Furthermore it’s extremely probably thr one other main producer, Samsung, will comply with swimsuit.
The fast transition to high-capacity 64-layer and 96-layer 3D NAND reminiscence units has enabled NAND flash producers to extend their NAND provide (as measured in bits) and finally saturate the market with a great deal of flash reminiscence. Meanwhile, demand for servers within the current months has been weaker than anticipated, smartphone alternative cycles are getting longer, and different drivers of NAND demand have additionally disillusioned. As a consequence, NAND provide has nicely exceeded demand, inflicting costs to fall by as a lot as 20% throughout a number of classes in Q1 2019, in line with TrendForce. To guarantee their short-term and long-term profitability, at numerous factors within the final couple of months the three producers have all introduced that they’re taking actions to attenuate their publicity throughout this newest bust.
Micron stated again in March that it was rigorously managing its NAND bit provide progress (to deal with oversupply no less than partially) and began to lower its whole NAND wafer begins by roughly 5% by chopping its legacy nodes. The firm didn’t point out plans to shrink its NAND bit provide, however lowering manufacturing of reminiscence utilizing older course of applied sciences will probably decrease its prices.
Meanwhile SK Hynix this week stated that it had stopped manufacturing of 36-layer in addition to 48-layer 3D NAND reminiscence, which nowadays has a somewhat excessive per-bit value relative to newer applied sciences. In the approaching months the corporate plans to extend manufacturing of 72-layer 3D NAND and within the second half of the 12 months it intends to launch 96-layer 3D NAND options for the SSD and cell markets. Furthermore, SK Hynix will decelerate the ramp up of its M15 fab in Cheongju, South Korea. The firm expects its NAND wafer output to lower greater than 10% in comparison with 2018. Just like Micron, SK Hynix doesn’t appear to have plans to decrease its NAND bit manufacturing, so it can nonetheless extra reminiscence than it did final 12 months.
Intel, which has historically focused on the enterprise a part of the SSD market, has additionally introduced this week it can cut back its NAND output in 2019. Intel didn’t elaborate whether or not it meant to scale back the variety of wafer begins, or do one thing extra radical. But regardless, the corporate continues to count on challenges with costs of NAND reminiscence going ahead, and is appearing accordingly.
Finally, whereas Samsung but has to announce its Q1 2019 outcomes, it has already warned traders that its income for the quarter could be down 60% in comparison with Q1 2018. Analysts have been attributing this to a number of elements, together with demand for flagship smartphones, decrease costs of DRAM and NAND reminiscence, and different weak markets. Given that the opposite main reminiscence producers are all taking steps to deal with the present oversupply, It is greater than probably that Samsung can even regulate its NAND enterprise this 12 months; although how they will accomplish that stays to be seen.
Sources: Intel, SK Hynix, TrendForce, Micron/SeekingAlpha, Samsung
