According to the latest survey by DRAMeXchange, TrendForce, although the outbreak of COVID-19 has made the shipment momentum of terminal products particularly weak in the first quarter of 2020, in the field of NAND Flash, due to the supply of bit output in the whole year of 2020 The annual growth rate has converged to 30%, coupled with the conservative capital expenditures of major suppliers, the average price of NAND Flash in the first quarter still rose by about 5% in the off-season.
Looking forward to the second quarter, buyer attitudes of data centers in North America and China are still quite positive, and Enterprise SSD has become the most obvious product out of stock in all application categories. As the proportion of Enterprise SSDs in overall NAND Flash shipments continues to increase, the strong price performance will also drive the overall NAND Flash average price to rise by at least 5% in the second quarter.
TrendForce has observed that current OEM customers intend to build up safety stocks as soon as possible, and continue to increase their purchases in the second quarter due to concerns that the epidemic may impact NAND Flash production centers in China and South Korea; under these considerations, it cannot be ruled out The current state of hot bargaining may imply some duplication or over-ordering (double booking).
As for the spot market and channels, the price weakness of NAND Flash is already obvious. Except for Wafer, some brands of SSD products have also begun to decline due to the pressure of cash-out and selling from relevant channel vendors. At present, the overall demand for NAND Flash in the second quarter is supported by Enterprise SSD, while the growth of other products is relatively weak. Looking forward to the second half of the year, due to the faster-than-expected spread of the global epidemic, the growth of NAND Flash may reverse in the second half of the year, or even start to decline as early as the third quarter.
Client SSD prices continued to rise in the second quarter due to tight supply, and eMMC/UFS orders have not been lowered for the time being
Since most NAND Flash manufacturers tend to transfer their production capacity to Enterprise SSD to obtain higher gross profit than the Client SSD product line, the supply of Client SSD is in a tight situation. In terms of demand, even though notebook shipments in the first quarter declined significantly due to the impact of the epidemic, the purchasing side believes that the subsequent Client SSD prices will continue to rise, so they have not revised down the current or even second-quarter purchases in order to improve security. The inventory level makes it highly likely that Client SSD prices will continue to rise in the second quarter, and it is expected to increase by at least 5%.
In the eMMC/UFS market, although the production of smartphones and other consumer products has been affected by the epidemic, the demand for SSDs in servers/data centers has not declined. Coupled with the healthy inventory levels of suppliers, it has been possible to reserve the capacity originally reserved for the mobile phone market. Wafers are used for SSD production, so there is no apparent oversupply yet.
Judging from the demand of mobile phone brand factories, due to the fact that the inventory level of NAND Flash is not high, and it is expected that the subsequent price will rise and the epidemic may have an impact on supply and logistics, the procurement plan has not been adjusted. However, the rapid spread of the global epidemic has made suppliers and brand factories begin to assess the possibility of a demand recession in the second half of the year, which may have an impact on purchasing demand in the second half of the year. For consumer products related to small and medium-sized eMMC, such as TVs and set-top boxes, although orders are still maintained at this stage, they may also face the pressure of inventory correction in the second half of the year. It is estimated that the price of eMMC will still increase by more than 5% in the second quarter, but the increase may not be extended to the third quarter.
Wafer prices are still supported in the short term, but it is not ruled out that they will weaken at the end of the second quarter ahead of schedule
Since the fourth quarter of 2019, due to the strong demand for SSDs in servers/data centers and the emerging demand for SSDs from new game consoles, under the effect of product crowding out, suppliers have reduced their supply to the Wafer market, which in turn drives prices to rise . At this stage, the demand for servers/data centers and the delay in the launch of game consoles have not yet been seen. The supply of wafers is still quite limited. Therefore, TrendForce expects that the wafer market will still have short-term support momentum in March and April. The demand for the three major terminal products in the first half of the year may be affected by the epidemic, and the possibility that the Wafer market quotations will start to weaken at the end of the second quarter cannot be ruled out.
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