In 2019, the global semiconductor market is approaching the freezing point, it has changed from the previous bull market to a bear market, and it is mainly due to the falling memory chip prices. However, the price of DRAM memory chips only began to swift from rising to falling in the Q4 quarter of last year. In fact, NAND flash memory is much more "unlucky" than DRAM memory, and the prices of NAND flash began to fall in the first half of 2018 until now. Thanks to the falling price of NAND flash memory, the price of SSD hard disk has fallen sharply, and the price of 1TB hard disk is only around $110/pc, and the price of some brands can be even lower. Whereas, NAND flash memory prices will not continue to fall, the decline rate in Q2 2019 has narrowed to about 10%, it is expected to stop falling prices by the end of the year.
The price of NAND flash memory had increased along with the one of DRAM memory in the mid of 2016 for more than one year, but the cost was starting to drop in the first half of 2018, it is mainly because the yield rate of 64-tier stack 3D flash of NAND flash memory was improved at that time, and the production capacity got soaring. The ratio of supply and demand in the market had changed; therefore the price of NADN flash memory had fallen sharply.
Since last year, the price of NAND flash memory had been falling, on the one hand, the production capacity had increased steadily, and the industry had begun to shift from 64-tier 3D flash memory to 96-tier 3D flash memory. And once the process for this transition is completed, the production capacity of NAND flash memory will continue to increase. But there has been no significant increase on the demand side, and smartphone as well as PC sales will continue to decline this year. At present, only the market of servers and data centers has increasing demands.
In addition, upstream suppliers of NAND flash have also reduced investment this year, the financial report for last quarter released by Micron earlier had mentioned that the production capacity of DRAM memory and NAND flash memory will be reduced by 5%, Samsung previously had also confirmed one strategy to cut investment and production capacity. The Other manufacturers are expected to follow this way.
According to the news of the memory industry, the price of NAND flash memory is still falling, but the decline rate has begun to be smaller than before. Micron mentioned in the financial report of last quarter that the average price of NAND flash memory fell by 20%, but they expect the price of NADN flash memory to fall by only 10% in Q2. As NAND flash prices approach the costs, there is not much room to fall, and NAND flash prices are expected to stop falling by the end of the year.
It is worth mentioning that Samsung, Micron and the other manufacturers also predicted that the price of DRAM memory would stop falling by the end of this year, and there was even possible to resume the status of price increasing. This means that the prices of NAND and DRAM memory chips are likely to usher one opportunity again by the end of this year. If the demand rebounds because manufacturers cut the production capacity, then the prices of these two memory chips will not fall again, and the worst situation is to keep price no dropping, and the best status is to return to the increasing moment as manufacturers expect.