A forecast has emerged that, in the first quarter of next year, the prices of not only DRAM but also NAND flash will enter a declining phase. In particular, as the price of enterprise solid-state drives (SSDs), which have played a significant role as 'cash cows' for memory manufacturers, is expected to turn downward early next year, there is the possibility that a 'semiconductor cold wave' could be reintroduced.
According to market research firm TrendForce on the 30th, the overall NAND prices in the fourth quarter of this year are expected to decline by 3% to 8%, and in the first quarter of next year, they are projected to drop by about 10% to 15%.
Due to the favorable winds of artificial intelligence (AI), the demand for enterprise SSDs, which has been robust, saw a price increase of 0% to 5% in the fourth quarter, the only NAND product to do so. However, a price decline of 5% to 10% for enterprise SSDs is anticipated in the first quarter of next year.
TrendForce noted, 'Memory companies will face increasing inventory levels and deteriorating order demand in the first quarter of next year.' It further analyzed that 'the demand for enterprise SSDs is expected to rise next year, but procurement levels are likely to decrease in the first quarter due to seasonal weakness.'
It added, 'Some suppliers are shifting to high-capacity products of over 60TB (terabytes) to meet the expected demand for enterprise SSDs next year, indicating that the inventory prices for 16TB and 30TB capacities will be significantly reduced.'
The sluggish performance of enterprise SSDs, which boosted the results of memory firms this year, may be short-term, but the price declines for consumer SSDs and eMMC products are expected to be more significant, foreshadowing a prolonged downturn in the overall NAND market. Consumer SSD prices are projected to fall from 5% to 10% in the fourth quarter of this year to 13% to 18% in the first quarter of next year due to seasonal off-peak periods.
TrendForce explained, 'The top priority for suppliers in the first quarter of next year will be to clear existing consumer SSDs.' It noted that 'considering the weakened demand and inventory pressures, suppliers will need to lower contract prices.'