Explosive stock! The crazy price cuts of SSDs will not stop. Micron and Kaixia start to reduce production. Other manufacturers will follow up.
According to the latest research report released by TrendForce, TrendForce, due to weakening demand for certain consumer electronics products,Memory prices continue to decline starting in Q4 2021. In addition, it is also affected by other factors: rising inflation, the Russian-Ukrainian war, the epidemic policy, etc., weak demand in peak seasons, etc., so these sales pressures extend from buyers to manufacturers.
In response to the above situation, Micron announced last week that it would reduce production of DRAM and NAND Flash, becoming the first major memory manufacturer to formally reduce its capacity utilization plan. Kioxia also followed Micron in announcing that it will reduce NAND Flash capacity utilization by 30% since October.
In terms of NAND Flash, Micron originally planned to gradually increase the proportion of 232-layer products from the fourth quarter of 2022. However, with the implementation of the company’s decision to reduce production, it is expected that Micron’s mainstream process will still be dominated by 176-layer products in 2023, while the wafer operating rate of traditional processes will also decline.
It remains to be seen whether there will be a significant production cut compared to NAND Flash. In addition to mentioning the current slight decline in capacity utilization in this field, Micron mainly emphasized its sharp reduction in capital expenditure in 2023, and the annual growth rate of DRAM production bits next year is only regarding 5%.
Kioxia and WDC originally planned to migrate to 162-layer products starting in 4Q22, but WDC slowed capex in 2023. Under the circumstance that funds are difficult to obtain and demand visibility is poor, the proportion of 162-layer products will drop significantly, and the company’s original plan to replace mainstream 112-layer products in 2023 will not be realized.
In terms of the supply and demand situation of the memory market in 2023, due to the conservative demand outlook, DRAM and NAND Flash have experienced severe oversupply in each quarter, and inventory pressure will continue to accelerate in the first half of next year.
