The South Korean truck driver union broke down with the government in wage negotiations and launched a large-scale strike, affecting Samsung’s NAND Flash plant in Xi’an, China. The supply of an important raw material, isopropyl alcohol, was blocked, which affected production operations; the legal person believes that it is expected to ease the NAND market in the second half of the year. Due to the pressure of oversupply, the decline in prices in the third quarter has a chance to converge, which is beneficial to Phison (8299-TW), ADATA (3260-TW), Team Group (4967-TW), Apacer (8271-TW) and other module factory operating performance.
The large-scale strike by the South Korean truck driver union prevented a local supplier of isopropyl alcohol from shipping to China, which further prevented Chinese wafer suppliers from supplying Samsung Electronics, triggering a series of butterfly effects. According to the Korea International Trade Association (KITA), the company is stuck with regarding 90 tons of isopropyl alcohol that South Korea cannot export, equivalent to one week’s shipments.
As Samsung’s Xi’an plant mainly produces NAND Flash, the production volume accounts for 42.3% of Samsung’s total NAND Flash production capacity and 15.3% of the global NAND Flash market output. , which will help alleviate the pressure of oversupply in the market in the third quarter. At the end of last year, Samsung’s Xi’an plant reduced its production load due to the local government’s lockdown measures, which also drove up the price of NAND Flash at that time.
In recent years, Samsung’s operation layout has focused on the enterprise-level SSD field, so it has maintained its original capacity expansion plan. Especially following the Xi’an lockdown incident, the NAND production line was once blocked. In order to ensure the stability of future factory operations, Samsung continued to increase the P2L production capacity in South Korea.
According to TrendForce research, due to the weak retail demand for NAND Flash wafer since March and the increasingly conservative outlook for shipments of other end products, suppliers have lowered their prices for sales. It is expected that the price of NAND Flash wafers may start to fall since May. , NAND Flash will gradually turn to supply in the second half of the year, and the price of NAND Flash will reverse in the third quarter, with an estimated average decline of 0-5%.
