First there were too many GPUs, then there were too many CPUs. Now there appears to be too much NAND flash on the market. That is the conclusion of a new analysis of the flash storage market. This oversupply of flash chips is so bad prices could drop as much as 13 percent in the upcoming quarter. It may be a good time to pull the trigger on an SSD, if you’ve been thinking about an upgrade.
The news of the flashopocalypse comes from industry analyst firm Trendforce. It says the recent deluge of NAND is due to lagging customer demand, continued flash output, and process advancement by manufacturers. The report summarizes the situation as a “rapid deterioration of the balance between supply and demand.” The result will likely be a disappointing 2H22, mostly affecting TVs, smart phones, and notebooks. The surplus NAND is also stressing resellers, who are under increasing pressure to offload their current inventory of flash. This could results in flash prices dropping from eight to 13 percent in Q3, and possibly into Q4 too. Trendforce had previously predicted a smaller drop, from 3-8%.
Another contributing factor is the rollout of 176-layer QLC NAND flash for client SSDs. Those drives have begun shipping and flash company YMTC is also aggressively pushing to expand its footprint in notebooks. This has resulted in increased pricing competition, resulting in flash manufacturers having to offer more price concessions. The hope is the concessions will convince them to place larger orders.
As you can see from the chart above, the oversupply is affecting the industry as a whole. Not even enterprise is safe, due to looming economic fears and reduced shipments of servers. Corporate orders are declining, as is business from Chinese cloud service providers. Suppliers have tried to rectify this situation with better prices, but the market seems to be at a near standstill. Trendforce says despite lower prices, buyers aren’t currently wiling to expand their orders.
Things weren’t supposed to be this way, at least for 3D NAND wafers. It was predicted that the lifting of COVID-19 lockdowns in China would spur a resurgence in the market after two sluggish quarters. Instead, inventory remains high while demand for wafers has remained soft.
This is just another sign of the state of the PC industry right now. Overall there just seems to be too much of, well, everything. Nvidia has too many 30-series GPUs in the channel. Apple and AMD are also being affected. According to reports, it’s bad enough they asked TSMC (along with Nvidia) to reduce their wafer orders. On top of the oversupply of everything, consumers are tightening their belts too. As recession fears continue to grow, consumers are becoming less motivated to make unnecessary purchases.
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