Global NAND Flash Revenue Rose 19.6% Sequentially in Third Quarter as Demand Outpaced Supply, According to TrendForce.
Prices of NAND Flash rose in the third
quarter as smartphone makers continued to generate robust demand for
related products and the technological transition from 2D-NAND to 3-NAND
manufacturing reduced the industry’s overall output. The latest report
from DRAMeXchange, a division of TrendForce,
finds that the revenue of the global NAND Flash industry grew 19.6%
sequentially in the third quarter.
At the same time, NAND Flash
suppliers made larger gains in respective their operating margins
compared with the prior quarter.
“The NAND Flash market outlook for the fourth quarter of 2016
indicates that NAND Flash supply will be under greater strain with the
advent of the peak shipment season season for end devices,” said Sean
Yang, research director of DRAMeXchange.
“Therefore, contract prices for
various NAND Flash products will see larger increases, which in turn
will take suppliers’ revenues and operating margins to new highs for
this year.”
Samsung
Samsung retained its first place position in the quarterly revenue
ranking as the company benefited from strong demand from Chinese
smartphone brands for high-capacity eMMC and UFS products. Among the
suppliers, Samsung currently has the largest global market shares for
high-capacity eMMC and UFS products.
The company is also the leader in
the global eMCP market. At the same time, Samsung shipments of
enterprise-grade SSDs have expanded as the supplier’s solutions offer
better bargain for customers.Samsung’s third-quarter NAND Flash bit shipments increased by 20%
compared with the prior quarter.
The supplier’s quarterly revenue from
NAND Flash sales for the same period advanced about 20% sequentially.Samsung’s revenue outlook for this fourth quarter is expected to be
even better than the third. Demands for eMMC, UFS and eMCP products will
be at their annual peaks on account of the seasonal increase in
smartphone shipments. Moreover, Samsung will continue to enlarge its
market shares for client- and enterprise-grade SSDs.
SK Hynix
During the third quarter, SK Hynix also enjoyed strong demand from
Chinese smartphone brands for eMMC and eMCP as well as stock-up
activities related to releases of new smartphones. Compared with the
second quarter, SK Hynix posted a 12% increase in its NAND Flash bit
shipments and a 7% increase in the average selling price (ASP) of its
NAND Flash chips. As a result, SK Hynix’s third-quarter NAND Flash
revenue rose 20.3% sequentially to around US$1.06 billion.
In terms of product planning, SK Hynix will be able to boost its
3D-NAND production capacity to around 20,000~30,000 wafers per month
before the end of 2016. The supplier will commence shipments of its
third-generation 3D-NAND Flash in the first quarter of 2017. The
supplier’s fourth-generation NAND Flash may also be ready for
small-batch runs by the second half of next year.
Toshiba
Results from Toshiba’s NAND Flash business from July to September (or
the company’s fiscal second quarter for 2016) showed that the upturn in
the NAND Flash market caused the supplier’s bit shipments to grow by
15% compared with the previous three-month period. Moreover, there was a
moderation in the decline of the supplier’s NAND Flash ASP. On the
whole, Toshiba’s NAND Flash revenue for its fiscal second quarter rose
about 17% sequentially. The supplier also saw increase in its operating
margin, reflecting a steady improvement in its NAND Flash business.
With regard to production planning, Toshiba’s newly rebuilt facility
Fab 2 at Yokkaichi (in Mie Prefecture, Japan) has been assigned to
produce 3D-NAND Flash and is expected to achieve a capacity of 40,000
wafers per month during this calendar fourth quarter (October to
December 2016).
The capacity of Fab 2 will expand again 2017 when the
facility is scheduled to begin mass production of its 64-layer 3D-NAND
Flash. Toshiba will also begin the construction of a new facility Fab 6
in February of 2017.
Western Digital
The calendar third quarter of 2016 was Western Digital’s first
quarter for the company’s fiscal year of 2017. During this period, the
supplier focus its investment on 64-layer 3D-NAND Flash.
The product is
now being tested by OEM customers and is expected to be available for
memory cards, USB drives and other removable storage devices at the
start of this December. Meanwhile, the supplier is already mass
producing products carrying its 48-layer 3D-NAND Flash. These items
include eMMC, eMCP and other mobile and removable storage products.
Western Digital’s 2D-NAND Flash is mainly produced on the 15nm
process and the supplier has done its utmost to optimize costs and
maximize yield for the technology. Hence, the 15nm 2D-NAND Flash remains
a major contributor to Western Digital’s revenue growth. Furthermore,
Western Digital’s annual bit output for NAND Flash is forecast to
increase by 45% in 2017.
Micron
In its fiscal fourth quarter for 2016 (from June to August), Micron
posted a 13% sequential increase in its NAND Flash bit shipments and a
1% drop in its NAND Flash ASP. Consequently, Micron’s revenue from
non-volatile memory for its fiscal fourth quarter rose by 10% compared
with the prior fiscal quarter to UD$1 billion.
The breakdown of Micron’s revenue also shows that the share of
component base in the total sales declined slightly to 50%, while the
revenue share of mobile NAND Flash product grew a little to 18%. SSD’s
share in the quarterly non-volatile revenue was 13%. Automotive and
other products represented about 19%.
Micron’s mobile products based on the 3D-NAND architecture have been
received favorably by customers. The supplier has also begun to ship
client-grade SSDs carrying 3D-NAND Flash. In the market for
enterprise-grade SSDs, Micron’s bit shipments from June to August rose
45% compared with the prior three-month period.
Micron is expected to
make significant improvements in the cost structure of its SSD portfolio
when its TLC 3D-NAND memory accounts for the majority portion of its
Flash output.
Intel
Between the second and third quarter of 2016, Intel’s NAND Flash
business saw bit shipments expanded by 25% and revenue grew by 17% to
U$649 million, thereby ending three consecutive quarters of sequential
decline.
While 2D-NAND chips made on the 16nm and 20nm processes still make up
the largest share of Intel’s NAND Flash-related product mix, the
supplier has begun shipments of its 3D-NAND enterprise-grade SSDs since
the third quarter.
Intel’s current 3D-NAND enterprise-grade SSDs are
considered better than the prior-generation counterparts in terms of
cost to performance. As for production planning, Intel’s NAND Flash fab
in Dalian, China is expected to achieve 10,000 wafers per month this
fourth quarter. The facility’s capacity will continue to expand
gradually on a quarterly basis in 2017.
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