Prices of NAND flashes which are the two main axles of the memory semiconductor market with DRAMs are expected to decline significantly starting this year. In 2021, NAND flash prices are expected to fall to one fourth of those of last year. However, in spite of price drops, with NAND flash demand and supply rising sharply, overall market sales will remain until 2021at the level of last year which was a super boom period.
According to market researcher IHS Markit on February 19, NAND flashes’ average selling price (ASP) will hit only 0.08 US dollars per gigabyte (GB) in 2021. Considering that the ASP was US$ 0.31 last year, the ASP will plummet a whopping 74 percent.
This is because supply shortage will be addressed. As NAND flash makers ramp up production capacities, the market will escape from a tight supply and demand situation. In fact, as supply has failed to meet demand since the end of 2016, NAND flash prices jumped 7.4 percent year on year in 2017.
However, IHS Markit predicted that NAND flash prices would not lead to a slump in the market. NAND flash sales are expected to increase from US$ 53.8 billion last year to US$ 59.2 billion this year. The market researcher also forecast that sales would reach US$ 56.1 billion in 2021 and maintain at the US$ 50 billion level. "It is based on an expectation that the bit gross of the NAND flash market will reach a rate of 40 percent per annum in the same period," an HIS Markit representative said.
The semiconductor industry partially agrees with the IHS market analysis, but stresses the need to pay more attention to changes in data capacities than prices. In addition to mobile devices such as smart phones, significant growth in data capacities of solid state drives (SSDs), cloud systems and servers is leading the market according to industry experts. "Even though prices are halved, if a consumer uses 1,000 US$ 1 NAND flashes this year and 2,000 US$ 0.5 NAND flashes next year, the result will be the same," said an official of the semiconductor industry. "Data demand is an issue more important to manufacturers than price drops."
All agree that control of the premium NAND flash market is becoming more important. This is because a way to minimizing a price drop is to launch a product with overwhelming performance that competitors cannot. Samsung Electronics massively invested in 64-layer 3D NAND flashes last year so secured a sufficient production yield and is taking the initiative in the market with SSDs for next-generation supercomputers and 256GB NAND flashes for automobiles among others. Samsung Electronics’s competitors such as Toshiba, Micron and Western Digital are close to mass-producing 64-bit 3D NAND flashes after Samsung Electronics. Last year, the Korean semiconductor giant took the largest share of the global NAND flash market with a 38-percent share, followed by Toshiba with 17 percent, Western Digital with 15 percent, Micron with 11 percent, SK Hynix with 11 percent and Intel with 7 percent.