With the decline in demand caused by inflation and the accumulation of market inventories, the NAND Flash market situation in the second half of the year has turned sharply downward and turned into an oversupply. TrendForce, a research institute, expects that the decline in the contract price of NAND wafers in the third quarter will expand to 30-35%; module manufacturers It is believed that, with the original factory at a breaking price, the quotation in the second half of the year will approach the cost price, and module factories with “deep pockets” will begin to replenish and build low-priced inventory.
Due to the sharp correction in the demand for smartphones and laptops, market consumption has declined, inflation concerns have risen, and inventory accumulation has further spread upstream. The peak season of the NAND Flash market in the third quarter was not prosperous, and the destocking of original factories was stagnant.
With the freezing of NAND Flash market transactions, buyers are passive and wait-and-see, and NAND manufacturers do not hesitate to sell at breaking prices. Therefore, TrendForce recently revised down the contract price of NAND Flash wafers once more. %, which has doubled to 30-35%, and may be revised by another 20% in the fourth quarter, which also means that the quotation in the second half of the year may be significantly revised by 50% compared with the first half of the year.
In order to meet the demand for digital transformation driven by the epidemic, the original NAND Flash factory has been actively expanding production capacity. With the cooling of market demand, the inventory pressure has reached a critical point. The original factory has set a breaking price in order to obtain a transaction, resulting in the possibility of quotation in the second half of the year. So it fell sharply.
Module manufacturers expect that with the original manufacturers releasing more room to adjust their quotations, the bargaining power of module manufacturers will increase. Companies with more cash are expected to build low-priced inventories at the end of the third and fourth quarters.
Phison (8299-TW) believes that due to the accumulation of original factory inventory, production may even be reduced in the fourth quarter, and the market may quickly correct by then; on the demand side, it is expected that the Christmas season at the end of the year can still be expected, and the supply and demand will also tend to balance in the first half of next year, and the market situation has a chance to return normal level.
