NAND prices decline in H1 2018 due to oversupply

This change makes SSDs a little cheaper to produce

Published: 16th April 2018 | Source: EIN | Author: Mark Campbell

NAND prices decline in H1 2018 due to oversupply

NAND prices decline in H1 2018 due to oversupply

According to data from DRAMeXchange, the NAND market has been oversupplied in Q1 2018, lowering the cost of flash memory slightly. This trend is expected to continue in Q2, despite overall increases in demand.
In the second half of the year, memory demand will increase due to seasonal changes in the market, with manufacturers reportedly lowering production expansion to account for this market trend. From a business perspective flooding the market with too much NAND is a bad thing, especially if they can dedicate their expansion resources to increasing DRAM memory supplies.
NAND demand is driven by several markets, from consumer and enterprise SSDs to mobile phones and a countless number of other devices. NAND pricing is expected to decline until the second half of 2018 when manufacturers will be able to adjust their output to prevent another oversupply. Note that demand is likely to increase in H2, which means that manufacturers will not be producing less memory to reduce market supply, they are merely slowing down their expansion efforts.

NAND prices decline in H1 2018 due to oversupply
In recent quarters DRAM pricing has skyrocketed due to growing demand for increased memory capacities, with NAND also seeing increases in demand. NAND memory pricing has not seen the same levels of inflation as DRAM memory, with the average amount of NAND in smartphones remaining relatively constant generation to generation, at least outside of high-end models. In the case of NAND supply has mostly stayed in-pace with demand, whereas DRAM has seen demand stretch DRAM supplies to their limits.
In the second half of 2018, the NAND market will be more constrained, though this will also be the time where several new DRAM manufacturing plants are expected to enter mass production, alleviating the DRAM shortage somewhat. Only time will tell how much these market forces will decrease the price of DRAM.
Do you think this NAND oversupply will last? You can join the discussion on NAND's decreased pricing in H1 2018 on the OC3D Forums.