Ok, this is something I find very confusing. I've been tracking the China Flash Market's price for 512GB TLC wafers, and the price has risen since Nov/Dec 2019. Despite the CoronaEbolaSyndrome, the price has continued to rise. The data is in this page somewhere....
en.chinaflashmarket.com
So today the price is $5.50.
You have to go back to Dec 2018 (not 2019, 2018) to get back to when the price was that high.
As we know, the NAND makers printed money like crazy in Q4 2018 and Q1,2 2019. The were all throwing off EPS and cash and happy as can be (and cutting forward capital spending plans in anticipation of price declines due to excess supply).
So today, all the NAND makers must be making a lot MORE 512GB TLC wafers as they are further along in the capacity expansion cycle than they were in Q4 2018.
So ..... aren't the NAND makers going to be able to produce and sell a LOT MORE NAND in 2020 (like, right now) than they did in late 2018 / early 2019, and sell that increased production at the same spot price that existed in the peak period of late 2018/early 2019? If my understanding of the spot price is correct (its at the same level it was when NAND makers were at peak earnings) and the NAND makers sell everything they can make, they should be making HUGE peak level profits......NOW! No?
The market doesn't seem to think so as the stocks are all doing down. But.......isn't the NAND spot price today (which continues to go up) a better indicator of demand than......well, anything else?
If anyone can explain why the NAND spot price (for 512GB TLC wafers, at least) is at the same level it was in Dec 2018 (good times for NAND maker's profitability) and yet the stocks ARE NOT reflecting good times, I would be interested to read an explanation.
The easy answer is the China Flash Market spot price is wrong. Other than that, I really don't understand. With oil when the spot price goes up, the oil producer stocks go up. With NAND it's not the same?? |
