Yup, it will be interesting. This is the first time I've paid sort of close attention to a memory downturn, I'm not sure how they "end". I don't know what are the normal BUY signals, so am interested to see how this cycle ends and turns up.
NAND seems like it's in a tough spot.
Smartphone unit growth is about zero. High end models (Apple, Samsung) are not selling well. Normally we would expect the high end models to consume the most NAND since they have the customers that will pay for 512GB high end devices. So....if the high end of the smartphone market is not consuming excess NAND, and smartphone unit growth is not consuming excess NAND, how can the smartphone market slow the price declines that come from manufacturing efficiencies?
The enterprise market for NAND is in the doldrums now, and expected to get back into action about summer 2019. But at that time, the price of NAND in summer 2019 compared to summer 2018 might be 50% lower, something like that. So even when the enterprise gets back to reasonable demand, do they generally need 50% more capacity than a year ago? I don't know, but if enterprise is going to consume the extra production capacity of NAND, since the price per bit will be so much lower, the enterprise will need to have some MASSIVE demand driver. Maybe it exists, but if so I don't know what it is.
That leave (I think) PCs to replace hard disks with increasingly inexpensive SSDs. That trend is a net negative for WDC, since they've gotta lose more disk unit sales than they gain SSD unit sales. At least this space has a lot of transition left to occur, so as price falls elasticity will accelerate the consumption of NAND in PCs, but this is the main space where the excess NAND can get dumped if its not gobbled up by smartphones or enterprise memory systems.
It's a mess, I don't know how it ends for the NAND makers. |
