Price reduction of NAND Flash leads to depressive market of SSD

Source:   Editor: admin Update Time :2019-05-31

According to Gounbot, a Taiwanese company for photoelectricity components, the cloud, outdoor lighting, LED and AI still were major consumer kinetic energy in the second quarter, but the price of NAND Flash fell sharply in the first quarter, leading to a sharp drop in SSD (solid state drive) and a flat market for mobile phones. Although revenue in the second quarter is expected to grow compared with the first quarter this year, the annual growth rate is likely to decline year on year.

On April 26, Gounbot held a financial report and announced its first quarter earnings of $1.31 billion, with a quarterly reduction rate of 18% and an annual reduction rate of 15%. Its gross margin rate was 13.1%, with a quarterly reduction of 0.3% and an annual increase rate of 2%. Operating profit was $36.77 million, a quarterly reduction rate of 38% and an annual increase rate of 47%. Pre-tax surplus was $60 million, a quarterly reduction rate of 35% and an annual increase rate of 35%, while a net gain was $46.68 million, a quarterly reduction rate of 42% and an annual increase of 41%. The net profit per share after tax was $0.02, which was lower than $0.03 in the fourth quarter of last year, but higher than $0.01 in the first quarter of last year. 
In the first quarter, the information products sector accounted for 65% of the total revenue, the photovoltaic sector accounting for 16% and the storage devices sector occupying 14%. The others were 5%.
Chen Guangzhong, chief executive of Gounbot Group, thought that at present NAND inventory has not been digested clearly. In terms of prices some people expected a rebound in the second quarter, but Chen still believed the decline is not continuous until the third quarter. However, current price reduction was indeed much smaller than that in the first quarter.
Chen Guangzhong was cautiously optimistic about the earnings of the second quarter of this year. He pointed out that almost every product has been downgraded from October last year to the first quarter of this year. Fortunately, sales in the second quarter were a mild growth compared with the first quarter. Whether the earning of the second quarter surpasses that in the first quarter is unknown until the actual results come out.
As for the gross margin, Chen Guangzhong is also optimistic that the gross margin in the second quarter will be better than that in the same period last year because some businesses were disposed last year.