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Technology Stocks : WDC, NAND, NVM, enterprise storage systems, etc.
SNDK 261.95+7.6%1:06 PM EST
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From: BeenRetired3/19/2019 7:17:12 AM
   of 4827
 
Interesting NAND bit cost/price chart...………………………………………………………………………………………………………………….

With that, it appears the NAND side is beginning to firm up. A recent DigiTimes report says NAND prices will fall at a slower pace. On top of my NAND point above which gives investors a sense of what is to come in the DRAM market, slowing NAND declines in pricing give way to profitability restoration. Many will erroneously claim NAND prices continuing to fall (which is what is happening) is terrible and you must wait till NAND pricing stops falling or starts increasing before a recovery begins. This is false. Micron and the other NAND manufacturers are continually cutting the cost to produce a bit. This means when NAND pricing slows, it allows the cost per bit to catch up and close the profitability gap.

Lower NAND prices don't mean less profit, necessarily.



(Author's example, not actual numbers)

Looking at my illustration above, I created a simplistic look at the correlation between cost per bit and price per bit (realistically measured in price per GB or capacity form factors). Looking at Q1' and Q2', you can see what a slowing of NAND pricing declines or falling at a slower pace looks like. Granted, cost per bit is not necessarily linear, you can see the gap closes between what it costs to produce NAND and what it can be sold for. This is where profitability comes in and can already be playing a factor in earnings - ahead of any kind of upward recovery in pricing.
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