NAND Market Monitor

NAND market overview

• Executive summary – market dynamics
• Current events - China sanctions, other news
• Market summary, near- and long-term
• Revenue – historical & forecast
• Shipments
• Pricing
• Operating margins
• Sufficiency
• Near-term supply & pricing outlook
• Capex

NAND market shares 

• Revenue share
• Bit shipment share
• Regional shares
• Segment shares

NAND demand

• Segment bit demand & share
• Mobile
• SSD summary
• Client/PC SSD
• Enterprise/datacenter SSD
• SSD vs. HDD summary
• Automotive
• Gaming
• Chromebook
• Removable storage

NAND supply

• Wafer production by supplier, fab location, process, and technology
• GB per wafer by supplier
• 3D NAND supplier roadmaps
• Bit production by process & technology
• Density mix by bits and units
• Technology bit mix by segment

NAND supplier profiles

• Industry capacity update
• Samsung
• Kioxia
• Western Digital
• Micron
• SK hynix
• Solidigm
• YMTC
• Other suppliers

Consolidation scenarios 

• Intel + SK hynix (complete)
• Western Digital + Micron
• Kioxia + Micron
• Kioxia + SK hynix
• Kioxia + WD
• “End-game” consolidation

Appendix 

• Kioxia IPO/consolidation update
• SK hynix / Intel acquisition – Solidigm

Yole Group coporate presentation

Kioxia Corp., Macronix International Co., Micron Technology, Inc., SK hynix Inc., Samsung Electronics Co. , Solidigm, Western Digital Corp., Winbond Electronics Corp., Yangtze Memory Technologies Corp. (YMTC) and more

A perfect storm of deteriorating demand & elevated inventories deepens the downturn

Worsening consumer economic sentiment, coupled with inflation and supply chain “kitting” challenges, has hampered Smartphone and PC demand. OEMs, who have carried elevated memory inventories due to COVID-related supply chain concerns and unrealized expectations of 2H 2022 demand growth, are in the process of de-risking their balance sheets and rapidly depleting memory inventories, which is resulting in a dramatic decline in NAND demand.

The latest server platforms from Intel and AMD have delayed several times, providing a headwind to near-term server shipments and associated memory demand. At the same time, NAND suppliers have built up significant inventory positions as technology-related production growth has continued to outpace demand.

The combination of elevated OEM and supplier inventories and deteriorating demand pushed the market into a severe downturn, starting in late Q2 2022 and worsening throughout the second half of 2022, with blended NAND pricing falling by more than 20% in both Q3- and Q4-22. NAND suppliers all posted losses in Q4-22—average NAND supplier operating margins were -36%, down from +5% in Q3-22.

Weak market conditions are expected to persist at least through the 1st half of 2023. As a result, the suppliers are taking actions to rebalance supply/demand dynamics. All NAND suppliers have reduced shipments into the market (therefore building inventory), and most suppliers have announced fab utilization cuts and/or wafer start reductions. Additionally, all suppliers have lowered capital expenditure plans for 2023 and delayed roadmap progression; NAND capex is expected to be down ~40% year-over-year

YMTC’s inclusion on the US DoC Entity List severely limits the company’s growth plans and places its future in serious jeopardy.

The outlook for 2023 is worrisome, but aggressive supplier responses that will result in historically low production growth, the resumption of normal OEM purchasing behavior as inventory levels normalize, and China’s pandemic reopening provide hope for a NAND recovery later in the year.

Despite turbulence in the NAND market, the long-term demand drivers remain intact

Over the past several years the NAND market has endured many challenges. These include a global pandemic, the conflict in Europe, escalating trade tensions with China, and widespread inflation. The market also dealt with multiple fab outages, severe supply chain issues, a new entrant to the market from China, and industry consolidation. These events have reinforced the notion that the only certainty in the memory markets is uncertainty.

The long-term outlook for the NAND market is mixed. Emerging megatrends are driving massive growth in data generation and local-, edge-, and cloud-storage requirements. Robust demand growth is augmented by the ongoing replacement of hard-disk drives (HDDs) with NAND-based solid-state drives (SSDs) and should push the market to new heights. On the other hand, NAND competitive dynamics are challenging, with several large suppliers, historically thin profit margins, and rising capital intensity.

Key drivers of NAND demand include enterprise Solid-State Drives (SSDs) at hyperscalers and traditional enterprise OEMs, increasing adoption of SSDs in PCs and gaming consoles, and continued content growth in smartphones and other mobile devices. These segments will continue driving the bulk of NAND bit consumption, though several emerging trends are poised to augment future growth, including AI and VR adoption, autonomous driving, and IoT.

Capital expenditures for the industry remain elevated to support the NAND architecture shift from planar (2D) to 3D structures and ongoing layer count growth. There are several announced or anticipated cleanroom additions which are needed to offset wafer throughput reductions as suppliers continue to progress through their 3D NAND roadmaps. Despite layer count growth and the emergence of QLC (and possibly PLC), technology-driven bit growth will slow as process and manufacturing complexities continue to rise.

Samsung is growing into its massive Pyeongtaek manufacturing site and has expanded its capacity in Xi’an, China; a Kioxia/Western Digital merger is rumored (in lieu of a Kioxia IPO); SK Hynix acquired Intel’s NAND/SSD business (which was renamed Solidigm); and Micron continues to be a 3D technology leader despite its relatively small market size. Meanwhile, China’s Yangtze Memory Technologies Co. (YMTC) continues to make impressive technological progress, but its long-term outlook is murky due to recent sanctions imposed by the US.

The NAND market monitor service is here to help you track this incredibly dynamic market and synthesize these moving pieces into a coherent picture.

Key Features

• Quarterly Excel database and PDF presentation with analyst access included
• Five-year market forecast for supply including fab capacity and wafer production, process & technology roadmaps, and demand by market segment, including client SSD, enterprise SSD, mobile, removable storage, automotive and consumer.
• Market shares from 2015-present by supplier, region, and segment
• Supplier financial data from 2015-present including revenue, ASP, operating cost per bit, and operating margin
• Detailed two-year quarterly ASP forecast for key NAND components and packaged solutions

The NAND Market Monitor and the Monthly Pricing Monitor include the following deliverables:

• Excel database with all historical and forecast data
• PDF slide deck with graphs and comments/analysis covering expected evolution
• Direct access to a Yole Développement analyst for one year, including opportunities for an on-demand Q&A as well as discussions regarding trends, analyses, forecasts, and breaking news

What's new

• The NAND downturn worsened in Q4-22 due to elevated supplier and OEM inventories and ongoing demand weakness
• NAND profit margins turned negative for all suppliers