The reduction in flash memory production helped the NAND
Hardware

The reduction in flash memory production helped – the NAND market returned to growth in the third quarter

The third quarter of 2023 saw dramatic changes in the NAND flash memory market, largely due to Samsung’s strong-willed decision to reduce production. After the Korean giant, other market leaders also took this measure, and customers switched to an aggressive purchasing strategy in anticipation of a decrease in supply. According to analysts, memory chip supply as a percentage of total volume (in bits) increased 3% compared to the previous quarter, and total revenue rose 2.9% to $9.229 billion TrendForce.

    Image source: samsung.com

Image source: samsung.com

Despite weak demand in the server segment, Samsung was able to return to positive performance due to the beginning growth of the consumer electronics segment, mainly driven by high-capacity chips for PCs and smartphones. In the third quarter, due to the tendency of customers to replenish strategic reserves, as well as a shift in operational focus towards profit maximization, Samsung emerged from the crisis – the company reduced production. In bit terms, shipment volumes fell 1-3%, average selling price (ASP) increased the same 1-3%, and the company’s NAND sales were $2.9 billion.

    Image source: trendforce.com

Image source: trendforce.com

Kioxia managed to increase ASP by 3% in the third quarter, driven by the restoration of wafer contract pricing and laptop makers’ shift to strategic inventory accumulation. A strong negative factor was the delay in orders from American smartphone manufacturers – shipments in bits fell by 10-15%, causing the company’s sales in the NAND segment to fall by 8.6% compared to the previous quarter to 1.34 billion US dollar fell.

At Micron, the situation is exactly the opposite, but the result is the same: the manufacturer maintained stable orders in the PC and mobile device sectors, and customers in the enterprise SSD segment moved to replenish inventory. The company kept shipments in bits at Q2 levels, but ASP fell 15% – as a result, revenue fell 5.2% to $1.15 billion. A recovery in contract prices is forecast in the fourth quarter, which will allow Micron to increase sales by 20%.

SK Group (SK hynix and Solidigm) and WDC (Western Digital Corporation) are riding the wave of recovery in consumer electronics demand. SK Group’s growth drivers were high-performance products for PCs and smartphones – this drove steady growth in shipments in bits and quarterly growth of 11.9% to $1.86 billion. WDC’s third-quarter financial performance exceeded forecast due to its PC and mobile device and gaming equipment segments: Revenue increased 13% quarterly to $1.556 billion.

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Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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