A new report from TrendForce indicates positive outcomes in revenue for branded suppliers of NAND Flash products in the second quarter of the year.
According to Sean Yang, Research Assistant Vice President of DRAMeXchange, the memory and storage research division of TrendForce, the price drops in the NAND Flash market and growing OEM demands at the end of May have provided a much needed boost to the branded suppliers’ Q2 revenues, which increased by an estimated 5.6% QoQ to US$ 7.649 billion.
This revenue growth trend is expected to continue for the rest of the year as the NAND Flash restocking demand intensifies under the peak sales periods for smartphones and tablets.
NAND Flash Manufacturer Highlights
Samsung’s revenues in the NAND Flash segment in the second quarter came from PC and data centre SSDs, while eMMC, eMCP, and memory card demand from China’s smart device market also provided a boost. Samsung’s bit shipment volume increased by over 20% QoQ in the second quarter, while ASP dropped by 10-15%. Bit shipment volume is projected to see double-digit growth as NAND Flash demand is expected to increase in the third quarter. Samsung’s aggressive stance on PC and data centre SSD will likely result in a market share increase.
Toshiba’s NAND Flash revenue saw only a miniscule growth of 1.2% in the second fiscal quarter of 2014, due to factors such as weak restocking momentum by strategic clients, relatively soft product prices, and Toshiba’s carefully controlled output. With strategic clients introducing new smartphones and tablets in the third quarter, Toshiba’s bit shipment volume is expected to see significant growth. The second phase of Toshiba’s Fab 5 will be completed in the third quarter, with small batch production beginning in the fourth quarter. Small batch production of 15nm 3D NAND Flash products will begin in the third quarter of this year, with initial focus on TLC products.
SanDisk’s focus on the SSD segment has resulted in the SSD revenue (both client and enterprise SSD) climbing to 29%, while bit shipment volume also increased largely by 31% QoQ in the second quarter. Volume production of 1ynm eMMC, eMCP, and SSD products successfully began in the second quarter, accounting for 60% of the manufacturer’s output by the end of the quarter. Part of the manufacturing capacity will be reserved for 19nm products, as the category remains popular with OEM clients, but 15nm products will see significant output in the first quarter of 2015. With only 5% wafer capacity growth, SanDisk’s bit output is projected to grow by 25-35% in 2014.
SK Hynix’s NAND Flash capacity returned to normal, pre-Wuxi levels, and smartphone and tablet demand began climbing around the same time, resulting in a 54% QoQ bit shipment growth in the second quarter. However, ASP fell by 19% QoQ due to its product mix and market supply and demand. As the peak shipment season for smartphone and tablet products arrives, OEM restocking demand is expected to help SK Hynix’s bit shipment growth stay above 20% QoQ in the third quarter.
Micron’s bit shipment volume in 2Q14 fell by 6% QoQ, compared to the previous quarter. ASP stayed flat, while average cost also did not change as the initial yield rate for 16nm products remains low. Micron’s NAND Flash revenue decreased by 5.7% QoQ. For the third quarter, as OEM SSD shipments are expected to pick up and eMMC/ eMCP products will continue to be promoted with Chinese smartphone clients, Micron’s bit shipment growth is projected to return to 10-15% QoQ.
Enterprise SSD, where Intel is the market leader, has benefitted from big data and cloud computing growth, with higher demand in the past few quarters than other NAND Flash applications. The high margins on enterprise SSD have attracted several other NAND Flash vendors such as Samsung, SanDisk, and Micron to challenge Intel. Additionally, since overall NAND Flash output has not increased substantially this year, with tight supply beginning in the second quarter, Intel’s revenue fell to US$504 million, with a 1.2% decrease. Increases in the production ratio of 16nm SSD products and diversification of NAND Flash supply will help lower Intel’s product cost.