Although NAND flash prices have rebounded since the start of the second half, the upward momentum is unlikely to continue due to a sluggish demand recovery, industry experts say. In addition, concern is raised over a supply glut next year due to massive investments by NAND flash makers such as Samsung Electronics, SK Hynix, Micron and Toshiba.
A slowdown would continue in the memory semiconductor market at least until the end of the first half of 2020, said Kim Soo-kyum, vice president of market research firm IDC, during the Semiconductor Equipment and Materials International (SEMI) Members' Day of 2019 held at COEX, Seoul on Aug. 27. In particular, with respect to NAND flashes, Kim expressed concern over oversupply due to large-scale investments by semiconductor companies.
“NAND flash prices rose not because they were in high demand, but because makers’ losses were so big that they raised the prices,” Kim said. “However, in the NAND flash market, it will not be easy to raise prices altogether because six to seven companies compete.
As you see, a demand recovery has not been strong in the NAND market yet and large-scale investment by companies will cause graver concern next year. “There are already talks about investment,” Kim said. “Even though inventories are on a gradual decline, a supply glut will become a problem due to too much investment.”
In fact, Samsung Electronics will start a full operation of the second line at its NAND flash plant in Xi'an, China, in the first half of next year. Toshiba is also converting its 2D NAND flash facility to a 3D one and its Iwate, Japan NAND flash plant is expected to go live in the fourth quarter of next year. Micron's newly built production line, Fab 10A, in Singapore is also expected to mass-produce 3D NAND flashes staring next year. SK Hynix is also preparing to expand the M15 plant exclusively for production of NAND flashes. China's YMTC is also expected to grow big enough to affect NAND flash prices and the supply of NAND flashes to the global market.