No overcapacity yet. From a S. Korean blogger on tech.
Samsung Electronics, SK hynix, Kioxia and other NAND makers sharply cut NAND flash supply… A full-fledged price surge amid ‘short supply’
Samsung Electronics, SK hynix, Kioxia, and Micron—the four global NAND flash manufacturers—are collectively reducing NAND flash supply in the second half of this year. While steering price increases through supply control, analysts note that production losses are inevitable as production equipment is being replaced with the quad-level cell (QLC) process, for which demand is surging, centered on AI data centers.
At the same time, Samsung Electronics, SK hynix, and Kioxia are pushing to raise NAND prices, which had stayed at cost levels throughout last year. In particular, Samsung is said to be discussing next year’s NAND supply volumes with major overseas customers while internally considering price hikes of 20–30% or more.
According to annual NAND flash production data from market researcher Omdia obtained by ChosunBiz on the 12th, Samsung Electronics has lowered its target for NAND wafer output this year to around 4.72 million sheets, about 7% down from the previous year’s 5.07 million. Kioxia also adjusted its output from 4.80 million last year to 4.69 million this year. Omdia expects the production-cut stance at Samsung and Kioxia to continue into next year.
SK hynix and Micron are likewise keeping output conservatively constrained in a bid to benefit from higher prices. SK hynix’s NAND output fell about 10%, from 2.01 million sheets last year to around 1.80 million this year. Micron’s situation is similar: it is maintaining production at Fab 7 in Singapore—its largest NAND production base—in the low 300,000-sheet range, keeping a conservative supply posture.
As major suppliers move in unison to control production, average selling prices (ASPs) for NAND products are rising sharply. NAND prices, which climbed 15% in just the last quarter, could surge a further 40–50% or more going forward, according to overseas market research firms. TrendForce reports that the spot wafer price of the most widely used 512-Gb triple-level cell (TLC) NAND chip rose 14.2% from the previous week to $5.51. Spot prices refer to prices for immediate transactions in the distribution market; when this price rises, it means the product has become harder to obtain.
That TLC-based NAND is in short supply also implies that major NAND suppliers are focusing on QLC, which offers higher profitability, instead of TLC. QLC and TLC refer to the number of bits stored in a single cell, the basic unit of NAND flash. TLC stores three bits per cell, whereas QLC stores four. For the same area, QLC can secure 30% more capacity than TLC, making it advantageous for producing high-capacity SSDs essential for AI data centers.
A semiconductor industry source explained, “As existing TLC-based NAND production lines are converted to QLC, which is essential for AI data-center SSDs, a natural production-cut effect—where some TLC NAND production equipment goes idle—is occurring at all four major suppliers. As is customary, the ‘losses’ in output that occur during equipment and process transitions tend to lead to sharp rises in market prices.”
Meanwhile, Samsung Electronics and SK hynix, which had long struggled with oversupply, are also moving to maximize profitability amid signs of NAND price increases. Earlier, U.S.-based SanDisk was said to have raised contract prices for NAND products by up to around 50% starting this month. With major North American big-tech firms, concerned about soaring NAND prices, embarking on “stockpiling,” some analyses suggest that next year’s NAND supply volumes are already sold out.
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