Memory chip market may be showing signs of bottoming out as China’s YMTC leads Samsung, Micron in raising prices

By Investor Empires On May 20, 2023

The memory chip market may be starting to decline after more than a year of price slump caused by a supply glut, as Yangtze Memory Technologies Corp (YMTC), China’s largest chip maker, is reported to be raising prices.

The Taiwan Economic Times reported Thursday, citing anonymous sources, that YMTC, which accounts for about 5 percent of the global NAND memory chip market, recently told customers it would increase prices for its 3D NAND flash memory by up to 5 percent. .

The Yemen Shipping Company did not respond to a request for comment.

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Other major memory chip makers such as Samsung Electronics, SK Hynix and Micron Technology are expected to follow suit and raise NAND prices by a similar range, according to Taiwanese media outlet DigiTimes.

Micron, the largest maker of memory chips in the United States — which is currently under a Chinese cybersecurity review — told distributors this month that it would not accept inquiries for DRAM and NAND flash products below current market prices, the report said.

“These moves indicate that these companies believe that the market has bottomed out and the imbalance between supply and demand is gradually easing,” said Wang Lifu, an analyst with research group ICwise.

“Since last year, many manufacturers have shut down their factories for a few days every month to control supply, but they may not adopt a production cut strategy after May,” Wang said. “However, whether NAND price will bottom out (for a longer period) or rebound quickly in the future is uncertain.”

NAND flash is a type of non-volatile storage technology that retains data even without power, making it ideal for electronic products such as smartphones, tablets, laptops, and hard drives.

YMTC 64-layer 3D NAND flash memory chips on a 300mm silicon wafer. Photo: Handout alt = YMTC’s 64-layer 3D 3D NAND flash memory chips on a 300mm silicon wafer. Photo: charity>

Yemen Mobile Telecommunications Company’s price increase comes ahead of market expectations regarding the recovery of the sector, which is expected to stabilize gradually in the second half of this year.

Industry insiders view the move as a positive step toward reversing the downward pricing trend fueled by global economic headwinds, sluggish market demand, and excess inventories.

Since the second quarter of last year, global NAND prices have fallen as much as 25 percent as supply chains scrambled to liquidate inventories, according to research firm TrendForce.

In a March report, TrendForce said prices fell 10 to 15 percent in the first quarter of this year due to oversupply as demand for products such as servers, smartphones, and laptops was weak, adding that prices “will have a chance of rebounding” in the fourth quarter. If demand remains stable.

KS Pua, CEO of Phison Electronics, a Taiwanese NAND flash supplier, said further price cuts are “not viable” and that some suppliers could face bankruptcy if the market does not recover, according to DigiTimes.

Analysts expect that major flash memory makers including Kioxia, Micron, Samsung, SK Hynix and Western Digital have incurred a combined loss of more than $10 billion after they were forced to cut prices.

Cheng Weihua, chief operating officer of YMTC, said at a forum in late March that supply and demand in the global NAND flash market “will reach equilibrium in the second half of the year,” mainly on the back of orders from smartphone, server and PC makers.

Among the most popular solid-state drives (SSDs) being offered on Chinese e-commerce platform JD.com, Samsung’s 1TB SSD will go for 559 yuan ($79.50), while some smaller brands offer SSDs. 2TB hard drive priced at less than 500 yuan.

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