Flash Memory Prices Increase Amidst Tight Supply

By WPG AmericasAugust 11, 2016

Prices of NAND flash memory chips have shot up due to a strong demand driven by the Chinese and Taiwanese smartphone producers, intending to integrate extended memory capacity in their products. Riding high on robust demands, the NAND flash memory bounced back from the sluggish decline trend for two consecutive months. As announced by DRAM Exchange on June 30, the average price of a 64 GB NAND flash memory volleyed to 2.24 dollars, a rise of 10.89% from the previous month.

Festivities and Apple’s iPhone 7 Spur the Demand for NAND Flash Memory

With Christmas and New Year around the corner, forecasts for the consumer electronics market are robust, which in fact is sparking the surge in demand for NAND flash memory based products. The price rise is being significantly fuelled by the boost in Chinese smartphone shipments and Apple’s eventual iPhone 7 product launch. Furthermore, the ever increasing demand for smartphone storage capacities is also a crucial factor fanning the price hike for 3D NAND flash memories. Slated for a recent release, Apple’s most anticipated iPhone 7 is said to be loaded with 256 GB NAND flash memory. “The iPhone can ramp up demand for NAND flash memories by about 3%,” DRAM Exchange said in one of its recent market research reports.

Stalled Production Adds Fire to the NAND Flash Memory Price Rise

The price increase of NAND flash memory can be attributed to a stifling supply, mainly caused by a complete lockdown of production operations at Samsung’s semiconductor plant in China, following an explosion at the Xi’an power substation in the middle of June.

Profit Predictions Riding the Price Increase of NAND Flash Affecting the PC Memory Market

The sharp hike in demand for NAND flash memory has cast a spell on the PC use memory chips, destabilizing the DRAMs market. The NAND price hike, bolstered by a consolidating demand for flash memory smartphone chips, is being viewed by leading memory makers as an opportunity to increase the profit margins, with big names like Micron Technology already stepping on the accelerator for NAND flash memory products, curtailing the traditional PC DRAM memory product line.

As a consequence of the constraining supply, 4GB DDR3 units are up by 11% as compared to the May price point, hovering at around $1.78 per unit. By the same logic, next-generation DDR4 memory prices have jumped by 10%, averaging at $1.8 per unit.

SSD - The Key Demand Motivator for NAND Flash Memory

Market research firm Technavio predicts that unit numbers for NAND flash memory will be on the rise, expected to hit the 10 billion mark in 2016, a stiff rise of 30% over the previous year.

The most crucial factor for the euphoric price run of NAND flash memories is the ever-growing demand for solid state drives (SSDs). The SSD, typically a NAND memory-based product, is now the primary storage device being used in mainstream consumer electronic products like tablets and laptops. According to industry reports, this segment alone consumes over 30% of the SSDs.

Moreover, the integration of SSDs in servers is strengthening the growth potential of NAND flash memory, subsequently triggering a price rise.