2023 is coming to an end, and the endless ups and downs of storage have finally reversed in the fourth quarter, especially the products represented by flash wafer in September, October, and November**continuous**, standing at the current time node, although it will take time to completely improve from the demand side, but under the effect of active production reduction by major original manufacturers, ** has been greatly tightened.
According to CFM flash market data, the spot market NAND Flash** index has risen by 40% since October. Recently, Western Digital has directly fired the first shot of NAND's price increase.
NAND big price increase!
Recently, Western Digital, the world's fourth-largest NAND Flash company, issued a price increase notice letter to customers.
In the letter, Western Digital said that the company will review hard drive product pricing on a weekly basis and expects to **will** in the first half of next year;;In the NAND chip part, the company expects that the next few quarters will be cyclical**, and the cumulative increase may reach 55% on the basis of the current **. Since the second half of last year, NAND flash chips** have plummeted, and then with Samsung, SK hynix and other major manufacturers have successively reduced production, superimposed mobile phones and other application terminals to warm up, restart the tide of pulling goods, NAND chips began to bottom out.
It is worth noting that at this stage, the industry is optimistic about the NAND chip to stop falling and rebound, but at present, most of the merchants are separately notifying customers of adjustments, and Western Digital directly issued a price increase letter to customers this time, and the expected increase is amazing, which can be called the first shot of a comprehensive price increase in the industry.
According to Trendforce's report this week, the revenue of the NAND Flash industry in the third quarter increased by 2% quarter-on-quarter9%。The main turning point in the market change was Samsung's aggressive production cuts. Previously, the buyer believed that the visibility of terminal demand was still low and was worried about the lack of peak season in the market, so he maintained a procurement strategy of low inventory and slow deliveryWith the sharp reduction in production of leading suppliers, buyers have become more positive in their purchasing attitudes due to the expectation that the first will be significantly reduced. In this context, at the end of the third quarter, the negotiation direction of the NAND Flash contract has been moving towards a stop decline or even a price increase, which led to a 3% quarter-on-quarter increase in NAND Flash shipments in the third quarter, and the overall consolidated revenue reached 92.2$2.9 billion, an increase of approximately 29%。From the perspective of the overall situation of the industry, the price increase tide of NAND flash will continue in the fourth quarter.
The continuous development of memory particles has brought pressure to increase costs, and module manufacturers have recently released their intentions to increase terminal products, mainly in SSD products.
The SSD appears to be upside down
According to CFM flash memory market data, the three SSD products in the statistics are OEM SSD 512GB SATA and OEM SSD 512GB PCIe 30、oem ssd 512gb pcie 4.0 of the industry** all fell to the bottom in mid-August this year, and its ** began to slowly rebound in late September.
With the recent heating up of the industry market, customers have shown a strong willingness to stock, and the supply and demand situation has become clearer. Due to the iterative capacity transfer of the original process, some flash wafer resources continue to be in short supply, and the price increase of scarce NAND resources makes the most end-controlled goods reluctant to sell. At the same time, some terminals with a wait-and-see attitude in the early stage, the decline in inventory level generated ** demand, and under the expectation of price increases next year, some industry customers released the demand for early stocking.
Channel** also showed similar characteristics, that is, channel** bottomed out in mid-August and then slowly recovered. However, with the end of domestic e-commerce, and the end of the overseas stocking season, the channel market stocking demand has cooled significantly, and it can also be found by observing the following table that the recent channel demand is insufficient to undertake price increases, and the channel SSD has slowed down significantly this week and the NAND** has gone higher, making the channel SSD** upside down.
The stocking heat is heating up, the channel capacity is insufficient, and the SSD ** is upside down, which is a difficult problem.
Next, let's take a look at the changes in the products of domestic and foreign SSD manufacturers in the past six months.
The price of SSD products at home and abroad has begun to rise
According to the statistics of the digital technology author's home love tearing machine, in the first half of the year, PCIe4The price of 0 SSD 1TB has been stable,**The basic card is 350 yuan,The price of all products has exceeded 400 yuan since the second half of the year,Critical P5PLUS and Western Digital SN770The half-year increase even exceeded 25%. The increase in 2TB products** is more moderate than that of 1TB, which may be related to the popularity of applications such as large memory of mobile phones, and the 1TB flash memory capacity is increasingly carried in new machines, which directly drives the demand for 1TB products.
It is worth noting that as of December 8th, Samsung980Pro 1TB's ** was raised again to 689 yuan, 2TB's**also**to1189, and other brands** basically remained at the level of November 23. There is even a slight decrease in the ** of the Western Digital SN770, which may be related to the event benefits of Double 12.
Let's look at the domestic PCIe40 The relevant selling price of the SSD product.
Among the domestic SSD brands, YMTC's Zhizhi, Longsys' Lexar, and Jiahe Jinwei's Guangwei series have certain advantages in terms of price increase and price, and these three brands have storage packaging manufacturing capabilities. The rest of the brands, such as Acer Predator and Patriot, saw their 1TB products rise by as much as 36%, while 2TB products also rose sharply.
So, from a demand perspective, how do SSDs perform in different application markets?
The demand is already there, and it will take time for the recovery to take time
Q4 The demand for enterprise-level SSDs has appeared, and the latest revenue rankings of the five original manufacturers have been released
Let's start with enterprise-grade SSDs. Enterprise solid-state drives (SSDs) are solid-state drives (SSDs) that are used in various enterprise-class scenarios such as high-performance computing, edge computing, high-end storage, and data centers.
This year, the server market continued to adjust inventory, the world's large cloud service providers cut capital expenditures, and the demand for the North American server market was cold.
Notably, North America is a prominent market for SSD production and applications, with the region including two of the world's largest economically developed countries, the United States and Canada. The well-known North American company offers cutting-edge SSDs as innovative memory options for businesses of all kinds. To gain a competitive advantage and improve business efficiency, U.S. companies are increasing their spending on IT infrastructure, which is increasing the demand for storage solutions, including SSDs, to increase data transfer speeds and achieve high efficiency. In addition, the region also has a strong foothold in the market, contributing to the market growth. Some of these include Intel Corporation, Micron Technology Inc., and Western Digital, among others.
Looking at the domestic market, some domestic Internet companies have contracted their public cloud services, and the expansion of public cloud has gradually shifted to be dominated by communication operators, but this year, the number of operator tenders has been delayed and the number has been reduced, and the related procurement needs of Internet companies and communication operators have cooled. Even though the demand for servers is shrinking, from a quarter-on-quarter perspective, the demand of some domestic Internet manufacturers has begun to recover since the fourth quarter, and the supply and demand sides have reached a consensus on the current storage ** at the bottom, which has brought stock demand to a certain extent.
According to TrendForce, some server OEMs have started to purchase enterprise-class SSDs since the fourth quarter as CSPs continue to deplete their inventory. Overall, although the contract price of enterprise SSDs remained unchanged from the downward trend in the third quarter, the revenue of enterprise SSDs increased by 15., driven by a 10% quarter-on-quarter increase in global procurement demand$600 million, an increase of 42%。
Looking forward to the fourth quarter, as the largest manufacturers expand the scale of production reduction in the fourth quarter, the quarterly contract price has bottomed out, and at the same time, the influx of urgent orders from server customers has not only led to the tightening of enterprise-level SSD**, but also the quarterly growth rate of enterprise-level SSD revenue in the fourth quarter is expected to exceed two percent in the case of volume and price.
Benefiting from higher procurement demand, Samsung's enterprise SSD revenue in the third quarter was 5$900 million, an increase of 108%。This year, affected by the decline in general-purpose server shipments, Samsung's enterprise-class SSD revenue has declined for four consecutive quarters, and began to return to growth in the third quarter.
SK Group (SK Hynix & Solidigm) received 3US$8.9 billion, an increase of 4% quarter-on-quarter, from the perspective of individual products, QLC enterprise SSD shipments did not grow significantly this quarter, and TLC PCIe products have come to an end due to customer inventory depletion, and the procurement strategy has turned positive. In the future, SK Group will focus more on the verification of CSP customers, and it is expected that there will be fierce competition in the CSP** territory in North America.
Micron also benefited from the rebound of server OEM orders in the second half of the year in the third quarter, which in turn drove revenue growth, and the output value of enterprise-class SSDs was 2$300 million, an increase of 93%。Subsequently, as the number of customer verifications increased, PCIe 40 product shipments will also be amplified.
With PCIe 40 product demand is stable and large, coupled with the demand for SAS interface products rebounding with server brand orders, Kioxia's enterprise SSD revenue in the third quarter was 2$100 million, up 2% sequentially.
Western Digital (WDC)'s enterprise SSD product sales were mainly concentrated in North American CSP customers, but most of the customers maintained a conservative purchasing strategy, and the total purchase volume still showed a decline in the third quarter. In the case of both volume and price decline, Western Digital's enterprise SSD revenue fell to 1$500 million, a decrease of 183%
Consumer-grade SSDs are expected to usher in a "warm spring".
Consumer-grade SSDs are widely used in computer equipment, mobile terminals, commercial electronics, automotive applications, and smart wearables, among which mobile phones and PCs are the two important application fields of consumer-grade SSDs.
In the mobile phone market, China's mobile phone market demand has seen some signs of recovery after at least nearly a year of weakness, and the latest data from the China Academy of Information and Communications Technology shows that in September 2023, the domestic market will ship 3327 mobile phones70,000 units, a year-on-year increase of 590%, of which, 5G mobile phones 287170,000 units, a year-on-year increase of 901%, accounting for 863%。
Although in the third quarter of this year, global smartphone shipments fell by 8% year-on-year, showing nine consecutive quarters of recession, and also setting a record for the worst shipments in the same period in the past decade. But on a quarter-on-quarter basis, global smartphone shipments in the third quarter increased by 2% quarter-on-quarter. Especially with the release of the iPhone 15 series and Huawei Mate60 series in September, the mobile phone market began to show a "warmth" that had not been seen for a long time. These factors together stimulate consumers' desire to buy, and it is expected that the domestic mobile phone market will continue to maintain a growth trend in the coming period.
According to Canalys' latest**, global PC shipments are about to return to growth after seven consecutive quarters of decline. The market is expected to grow by 5% in the fourth quarter of 2023, driven by a strong holiday season and improved macroeconomic conditions. Looking ahead, full-year 2024 shipments are expected to reach 26.7 billion units, up 8% from 2023, driven by Windows refresh cycles and the rise of AI capabilities and ARM-based devices.
Ben Yeh, an analyst at Canalys, said: The global PC market is on the road to recovery and is expected to return to 2019 shipment levels next year. The impact of AI on the PC industry will be far-reaching, with leading OEMs, processor manufacturers, and operating system providers all focused on launching new AI-capable models in 2024. These initiatives will enhance the need for refreshes, especially in the commercial sector. The total shipment share of AI-enabled PCs is expected to be around 19% in 2024. This includes all M-Series Mac products as well as emerging products expected in the Windows ecosystem. However, as more compelling use cases emerge and AI capabilities become expected, Canalys expects rapid growth in the development and adoption of AI-enabled PCs.
With the recovery of the mobile phone and PC market, the consumer SSD market is expected to usher in a "warm spring", but the current downstream consumption of consumer electronics is still insufficient, and the signs of recovery are not particularly clear.
The sweet spot for SSDs has passed
Storage module factory ADATA previously said that with the emergence of large factories to significantly reduce production, it is optimistic about storage from the fourth quarter of this year to the first half of next year. From next year, it will enter a two-year storage long pattern, and the market supply will be tight and out of stock in the next two years.
As for whether SSDs will cause a shortage of stocks next year, it depends on a combination of factors. Judging from the current situation, the original factory is eager to make a profit at the expense of drastic production cuts and strict control of shipments, under the influence of a series of operations, next year or there may indeed be a tight supply situation.
What is certain is that the ** sweet spot of SSD has passed, and price increases have become the main theme of the market.