▲ 2022 NAND Flash Price Forecast (Image Source: TrendForce)


WD and Kioxia Production Resumption Schedule Uncertain… Q2 Price Impact Expected

TrendForce, which had predicted a decline in NAND flash prices through the third quarter of 2022, overturned its previous forecast with a price increase.

TrendForce predicted that prices for NAND flash memory used in smartphones would fall by 5–10% starting from the first quarter of 2022 as demand decreased, but stated that they could actually rise by 5–10% due to material contamination at Western Digital and Kioxia factories.

There are various reasons for predicting a decline in NAND flash prices.

It was predicted that client SSD prices would fall by 5–10% in the first quarter of 2022 compared to the fourth quarter of last year as Western Digital entered the QLC market and formed a competitive landscape with Intel and Micron.

UFS and eMMC were also predicted to fall by 8–13% and 5–10%, respectively, due to decreased demand.

One reason for the expectation of a price drop was that the production crisis at Samsung's factory due to the Xi'an lockdown was not significant.

Produced at the Xi'an factory Samsung Electronics' NAND flash accounts for 42% of total production.

TrendForce determined that while there would be an impact on logistics due to city lockdowns, there would be no issues due to sufficient inventory.

The shutdown of Western Digital and Kioxia's NAND factories due to material contamination overturned predictions.

Kioxia announced on its website on the 10th that contamination had occurred in materials used for chip manufacturing at its NAND factories in Yokkaichi and Kitakami, Japan.

Kioxia stated that it has 3D NAND flash inventory so there are no issues with shipments, but there is a possibility that production may be affected, adding that it has not affected 2D NAND flash memory.

In the third quarter of last year, Western Digital and Kioxia ranked second and fourth, respectively, in the global NAND market, with market shares of 13.2% and 19.3%, which is expected to have an impact on prices.

▲ WD·Kioxia NAND Capacity and Market Share (Image Source: Shinhan Investment)

Shinhan Investment & Securities projected that the accident would reduce global NAND production by 8%, leading to an improvement in supply and demand.

It was reported that in the worst-case scenario, it is predicted that it will take about three months to verify yield and reliability, so the extent of Kioxia's production disruption could be greater than the disclosed volume.

According to the Japan Times, Western Digital and Kioxia have made no mention of when they will resume production.

TrendForce revised its forecast that NAND flash prices would fall by 8–13% in the first quarter of 2022 to a 5–10% decline, 202The forecast for a 5-10% decline in prices in the second quarter of the second year was revised to a 5-10% increase.

With the production of NAND flash memory estimated to decrease by 6.5 exabytes (6.5 billion GB) due to this situation, it is predicted that if Western Digital, which holds the second and first positions in the client SSD and eMMC markets respectively, faces supply disruptions, a price increase in the second quarter of 2022 will be inevitable.