NAND Market Expected to Cool in Q1

Release time：2017-12-13
author：Ameya360
source：Dylan McGrath
reading：1035

Contract prices for NAND flash memory chips are expected to decline in during the first quarter of 2018 as a traditional lull in demand following the year-end quarter, coupled with bit growth of 5 percent, catches up with a market that has been red hot throughout 2017, according to DRAMeXchange, a research firm that tracks memory chip pricing.

DRAMeXchange (Taipei) expects NAND demand for notebooks, tablets and smartphones to drop by more than 15 percent from the fourth quarter of this year. The first quarter of the year generally shows declines in sales and demand compared with the fourth quarter, although NAND contract prices increased in the first quarter of 2017 as a lingering NAND shortage was stoked by the transition from 2D NAND to 3D NAND.

Bit output is expected to grow as suppliers continue to improve their production capacity and yield of 3D NAND flash, the firm predicted.

Oversupply of NAND in the first quarter of 2018 is expected to be a temporary situation. DRAMeXchange is forecast a tight supply and price increases again in the second half of the year. 

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NAND Flash Manufacturers to Cut Capex by 2% YoY in 2019 Due to Worsening Oversupply
Trade news

NAND Flash Manufacturers to Cut Capex by 2% YoY in 2019 Due to Worsening Oversupply

Experiencing an oversupply over the entire year of 2018, the global NAND Flash market continues to face excess capacity this year as the demand outlook for notebooks, smartphones, servers and other end products remains weak, reports DRAMeXchange, a division of TrendForce. NAND Flash manufacturers have slowed down the capacity expansion by cutting capex in 2019, aiming to moderate the oversupply by limiting the bit output growth.South Korean manufacturers have taken initiatives to cut their NAND Flash capex due to the worsening oversupply in 2018, says DRAMeXchange. Even though the total capex in the whole NAND Flash industry has been cut by nearly 10%, the oversupply has continued. Looking ahead to 2019, U.S.-based manufacturers would also lower their semiconductor capex, and the total capex in the global NAND Flash industry is expected to be $22 billion, about 2% YoY lower than in 2018.Influenced by the adjustments in capacity expansion, 92/96-layer 3D NAND products would only account for about 32% of the industry’s total output by the end of 2019, while the portion of 64/72-layer products remains over 50%, although the major manufacturers have entered the mass production of 92/96-layer 3D NAND since the fourth quarter of 2018. As the manufacturers slow down capacity expansion and migration to advanced process, the bit output growth of NAND Flash is expected to be around 38% in 2019, significantly lower than over 45% in 2018.As for the capacity adjustments of manufacturers, DRAMeXchange notes that Samsung’s NAND Flash bit output growth is expected to be around 35%, considering the following two factors. First, Samsung would continue to reduce its production capacity for 2D NAND. Second, the operating capacity would also decrease compared with the end of 2018, since the 92-layer process requires more space in the fab. The slowdown in bit output growth would have great impacts on the global NAND Flash production, because Samsung's share in the NAND Flash market is about 30%.SK Hynix and Toshiba/Western Digital also have a chance to see smaller bit output growth. The two companies have respectively new M15 fab and Fab 6, but would also be affected by the production reduction plan or capacity transfer to previous-generation process. Therefore, DRAMeXchange has revised the forecast of their annual bit output growth to less than 50% and 35%, down from previous forecast of 50% and 40%, considering the weak demand outlook.Micron's new fab in Singapore will not officially enter mass production until 2020, so the company’s wafer capacity per month in 2019 will remain flat when compared to 4Q18. Intel plans to reach a full load capacity in its Dalian fab, but does not have other capacity expansion plan. The joint bit output of Micron and Intel would grow by nearly 40% in 2019, noticeably lower than 45% in 2018.In terms of the NAND Flash price trends for 2019, the quotes for various product lines would witness apparently steeper drop than DRAMeXchange’s previous forecasts, indicating the excess inventories faced by manufacturers. DRAMeXchange expects a quarterly decline of 20% in 1Q19, higher than previous forecast of 10%, and a further decline of nearly 15% QoQ in 2Q19. For 2H19, the price decline may be slightly moderated considering the coming of peak season, but prices would continue to fall by around 10% each quarter. It remains to be seen whether manufacturers are able to further limit their bit output growth. In sum, the average NAND Flash price would decrease by nearly a half in 2019, according to the calculation of DRAMeXchange.
2019-01-11 00:00 reading：1179
Contract Prices of NAND Flash Products to Drop Further in 1H19; Price Decline Would Reach 10% in 1Q19
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Contract Prices of NAND Flash Products to Drop Further in 1H19; Price Decline Would Reach 10% in 1Q19

DRAMeXchange, a division of TrendForce, reports that the bit output from the NAND Flash industry in 2018 turned out to be higher than expected, as suppliers had steady yields of their 64-layer 3D NAND production. NAND Flash demand, however, has remained sluggish due to the looming trade war between China and the U.S., the shortage of Intel CPUs, and the lower-than-expected sales of new iPhone devices, despite the year-end busy season.Looking ahead to the first half of 2019, NAND Flash manufacturers have tried to slow down their production capacity expansion, but the seasonal headwinds and high inventory levels would only intensify oversupply concerns in the market. Contract prices of NAND Flash products in 1Q19 are expected to drop further by around 10%.DRAMeXchange points out that the eMMC/UFS sector has seen a steeper price decline in 4Q18, since Chinese smartphone manufacturers attempt to consume inventories and adjust production plans by the end of the year. The inventory consumptions are expected to continue in 1Q19, so the contract prices of eMMC/UFS products would witness further fall of nearly 10%.As for the trend in the SSD market, DRAMeXchange expects Client SSD contract prices to fall by nearly 10% in 1Q19. The global notebook shipments for 1Q19 are estimated to decrease slightly by over 15% QoQ, the bit demand for SSD will grow more sluggish and prices will grow weaker, despite the increasing SSD adoption rate in the PC market and the memory content upgrades.Enterprise SSD market has become a battleground for all manufacturers as the demand for servers keeps growing, which will make the price competition more intense in 2019. For the first quarter of next year, the Enterprise SSD contract prices would also fall by more than 10% considering the seasonal headwinds.With regard to the demand in channel market, module makers have abundant supply this year, but as the NAND Flash prices continue to fall, module makers need to clear their inventories at the end of each month to cut loss. They even have to sell defective products to keep profitability, which is rather disruptive in the market. While major NAND Flash suppliers make a good profit this year, module makers are struggling with the worsening profitability. Looking ahead, the market situation is highly likely to remain tough for module makers in 1H19.
2018-12-18 00:00 reading：1212
Total NAND Flash Revenue Rose by Just 4.4% QoQ in 3Q18
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Total NAND Flash Revenue Rose by Just 4.4% QoQ in 3Q18

DRAMeXchange, a division of TrendForce, reports that the bit output from the NAND Flash industry increased steadily in 3Q18, as suppliers raised the yields of their 64/72-layer 3D NAND production. NAND Flash demand, however, had yet to catch up with supply despite the year-end busy season. The shortage of Intel CPUs and the lower-than-expected sales of new iPhone devices have respectively stifled the demand growths related to notebook PCs and smartphones. Also, the US-China trade dispute has been a negative influence on the whole market. Because the NAND Flash market had been in oversupply since the start of 2018, contract prices of NAND Flash products in 3Q18 registered significant declines from the previous quarter, and the average price drop was 10-15%.“The market for NAND Flash is expected to remain in oversupply during 4Q18, with steeper price decline for various NAND Flash products,” says DRAMeXchange analyst Ben Yeh. Memory module makers and OEMs are now at the end of their preparation for the year-end holiday season in North America and Europe, so they are reluctant to extend their inventories now. In addition, the US-China trade dispute simmers, leading to weaker demand. Particularly, price competition is intensifying in the markets for Enterprise SSDs and NAND Flash wafers. NAND Flash suppliers are concentrating on Enterprise SSD market to retain gross margins and on wafer market for greater digestion of inventories.SamsungSamsung’s NAND Flash revenue for 3Q18 rose by 2.1% QoQ to US$6.05 billion. Although demand was lower than anticipated for the busy season, Samsung maintained a QoQ growth of more than 20% in bit shipments because it has remained the dominant supplier of NAND Flash for flagship smartphones and recorded increasing shipments of its SSDs for PCs and servers. Nevertheless, falling prices across the market also resulted in a near 15% QoQ decline in Samsung’s ASP.Samsung’s consumer-grade SSDs (for the channel market) are presently using 3D NAND Flash made with the fifth-generation manufacturing process. The process will be progressively applied to the production of Client SSDs for PC-OEMs and UFS mobile solutions. Because the oversupply problem has grown to become more significant since the start of 2018, Samsung will slow down the pace of the process migration during 2019. This also means that the mainstream architecture in the NAND Flash market during 2019 will still be 64/72-layer 3D NAND.SK HynixSK Hynix’s NAND Flash revenue for 3Q18 advanced by 6.0% QoQ to US$1.83 billion. SK Hynix gained from the seasonal growth in smartphone shipments and the steady growth of its SSD sales. As a result, its bit shipments for the quarter also grew by 19% QoQ. Still, SK Hynix posted a 10% QoQ decline in its ASP because the demand growth was smaller than anticipated and not enough to offset the effect of oversupply.SK Hynix continues to concentrate on product sales in the mobile storage market. Its shipments of mobile solutions that are 128GB or higher have expanded noticeably following the releases of smartphones with higher-end specifications (e.g. the new iPhone devices and Chinese branded smartphones featuring an all-screen front). The success in the mobile storage market has also sustained the growth of the supplier’s bit shipments. In the SSD market, SK Hynix has been focusing on the sales of products based on 72-layer 3D NAND Flash. Consequently, SSDs accounted for more than 20% of SK Hynix’s total bit shipments in 3Q18.ToshibaThe demand growth resulting from the traditional busy season and the release of the new iPhone devices enabled Toshiba’s bit shipments to increase by more than 20% QoQ in 3Q18. However, falling prices in the end market caused Toshiba’s ASP to drop by almost 15% QoQ in the same period. Taken together, Toshiba posted a small increase of 1.9% QoQ in its quarterly revenue, totaling US$3.2 billion.The recent survey of Toshiba’s capacity and technology plans shows that the share of 64-layer 3D NAND production in the supplier’s total output has already surpassed 70%, and more than 50% of the supplier’s total production capacity is devoted to 3D NAND Flash. Additional production capacity for Toshiba during 2019 will come from the expansion of its Fab 6. Considering the market oversupply and the maturity of the supplier’s technology, Fab 6 will primarily manufacture products based on 64-layer 3D NAND.Western DigitalWestern Digital increased its bit shipments by 28% QoQ in 3Q18. This impressive shipment growth was attributed to the supplier’s advantages in the retail and channel market as well as the strong sales of its economically priced SSDs. In the same quarter, Western Digital also began to ship its high-density UFS products. On the other hand, the supplier’s ASP fell by 16% QoQ because of the general price slump for NAND Flash products. Western Digital’s 3Q18 revenue came to US$2.534 billion, amounting to an increase of 7.0% QoQ.In response to the oversupply problem during 2018, Western Digital will be limiting its CAPEX for 2019 and will scale back its future capacity expansion efforts. Hence, Western Digital is expected to slow down slightly with respect to the capacity expansion and the development of 96-layer 3D NAND Flash in 1H19.MicronMicron’s bit shipments in 3Q18 surged by more than 25% QoQ owing to the busy season in the smartphone market and the increase in the sales of its SSDs. Nevertheless, Micron still exerts great influence over the channel market. And because of the steep price drops in the channel market, Micron’s ASP fell by nearly 15% QoQ in 3Q18. All things considered, the supplier’s revenue for the same quarter rose by 14.7% QoQ to US$2.23 billion.To improve its cost structure, Micron has been decreasing the shipment share of products for the channel market. The company’s primary aim in the SSD market is to release products featuring both the NVMe interface and QLC NAND Flash in order to meet the demand for high-density storage. In the mobile storage market, Micron is continuing its collaboration with Chinese suppliers and searching for more opportunities in that country. Micron also began making product shipments in China during 3Q18.IntelIn 3Q18, Intel’s bit shipments kept growing at a QoQ rate of more than 10% due to its long-term dominance in the Enterprise SSD market. Despite prices spiraling downward in the NAND Flash market, Intel was able to keep the decline of its ASP just slightly larger than 9% QoQ. Its revenue performance remained relatively constant from the previous quarter, totaling US$1.08 billion. On the other hand, Intel reached its peak profit for this year in the third quarter thanks to the cost reduction associated with the increased use of 64-layer 3D NAND Flash in its SSDs (over 50% of its total SSD shipments in 3Q18).The additional production capacity made available by the second-phase expansion of Intel’s Dalian fab came online in 3Q18, and will achieve full capacity in 1H19. In addition, Intel and Micron have terminated their cooperation in the field of non-volatile memory. Although Micron will be acquiring the remaining interest in IM Flash Technologies, Intel can still use the Lehi plant for the production of 3D XPoint until the end of 2020. After that, however, Intel is on its own in the development of the third-generation of 3D XPoint products, so Intel will likely set up in-house production for this type of memory in the future.
2018-11-20 00:00 reading：1213
Solution for next generation nanochips comes out of thin air
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Solution for next generation nanochips comes out of thin air

Researchers at RMIT University have engineered a new type of transistor, the building block for all electronics. Instead of sending electrical currents through silicon, these transistors send electrons through narrow air gaps, where they can travel unimpeded as if in space.The nano-gap transistors operating in air. As gaps become smaller than the mean-free path of electrons in air, there is ballistic electron transport. Credit: RMIT UniversityThe device unveiled in material sciences journal Nano Letters, eliminates the use of any semiconductor at all, making it faster and less prone to heating up.Lead author and PhD candidate in RMIT’s Functional Materials and Microsystems Research Group, Ms Shruti Nirantar, said this promising proof-of-concept design for nanochips as a combination of metal and air gaps could revolutionise electronics.“Every computer and phone has millions to billions of electronic transistors made from silicon, but this technology is reaching its physical limits where the silicon atoms get in the way of the current flow, limiting speed and causing heat,” Nirantar said.“Our air channel transistor technology has the current flowing through air, so there are no collisions to slow it down and no resistance in the material to produce heat.”The power of computer chips – or number of transistors squeezed onto a silicon chip – has increased on a predictable path for decades, roughly doubling every two years. But this rate of progress, known as Moore’s Law, has slowed in recent years as engineers struggle to make transistor parts, which are already smaller than the tiniest viruses, smaller still.Nirantar says their research is a promising way forward for nano electronics in response to the limitation of silicon-based electronics.“This technology simply takes a different pathway to the miniaturisation of a transistor in an effort to uphold Moore’s Law for several more decades,” Shruti said.Research team leader Associate Professor Sharath Sriram said the design solved a major flaw in traditional solid channel transistors – they are packed with atoms – which meant electrons passing through them collided, slowed down and wasted energy as heat.“Imagine walking on a densely crowded street in an effort to get from point A to B. The crowd slows your progress and drains your energy,” Sriram said“Travelling in a vacuum on the other hand is like an empty highway where you can drive faster with higher energy efficiency.”But while this concept is obvious, vacuum packaging solutions around transistors to make them faster would also make them much bigger, so are not viable.“We address this by creating a nanoscale gap between two metal points. The gap is only a few tens of nanometers, or 50,000 times smaller than the width of a human hair, but it’s enough to fool electrons into thinking that they are travelling through a vacuum and re-create a virtual outer-space for electrons within the nanoscale air gap,” he said.The nanoscale device is designed to be compatible with modern industry fabrication and development processes. It also has applications in space – both as electronics resistant to radiation and to use electron emission for steering and positioning ‘nano-satellites’.“This is a step towards an exciting technology which aims to create something out of nothing to significantly increase speed of electronics and maintain pace of rapid technological progress,” Sriram said.
2018-11-20 00:00 reading：1091
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