NAND Flash ushered in the first upward price increase in this cycle, and the inflection point of storage prices is approaching?

Memory chips ushered in the first wave of price increases since the recovery of the semiconductor cycle.

A few days ago, it was reported that Sandisk, a world-renowned memory chip manufacturer, issued a price increase notice letter showing that it plans to increase the price of all NAND Flash (flash memory) products for channel and consumer customers from April 1, with an increase of more than 10%.

The relevant person in charge of a number of memory chip listed companies confirmed the above price increase news to the first financial reporter.

Since 2024, the price trend of NAND has been weak and the recovery of terminal demand has been weak, and overseas OEMs such as Micron, Hynix, and Samsung have restarted their production reduction plans to cope with the continuous decline in NAND prices. The global NAND production capacity is monopolized by five overseas OEMs with a market share of more than 80%, and the effect of the original manufacturer's production reduction is immediate.

As the largest subdivision in the semiconductor field, storage is widely used in PCs, mobile phones, smart wearables, automobiles, security and other fields.

The first quarter is the off-season for demand in the electronics industry, does NAND price increases indicate that an inflection point in storage prices is coming? The person in charge of a number of relevant listed companies told reporters that storage prices are expected to usher in an inflection point in the second half of the year, and performance depends on changes in terminal demand.

The reduction of original factory supply is transmitted to the downstream

NAND Flash is widely used in downstream applications such as PCs, smartphones, smart wearables, automobiles, video surveillance, and smart homes for data storage. The current round of NAND product oversupply is mainly due to the last round of semiconductor cycle upward, NAND manufacturers in order to meet the growth of market demand, continue to expand production capacity, after the cycle enters the downturn, NAND prices continue to fall, some suppliers face the dilemma of losses.

Since last year, the global semiconductor cycle has entered an upward stage, but the market demand for mobile phones, automobiles and other markets has recovered slowly, and under the impact of excess NAND supply, product prices have weakened, and the price of consumer-grade storage has declined significantly. In response to the oversupply in the market, Micron, Samsung, SK hynix, Kioxia and other OEMs have restarted more resolute production reduction measures since the fourth quarter of 2024 to stop the downward trend of NAND prices.

Regarding the reasons for the price increase, SanDisk also said that the supply and demand dynamics of the storage industry continue to evolve, and it is expected that the industry will soon transition to a state of short supply. TrendForce believes that the supply and demand structure of the NANDFlash market is expected to improve significantly in the second half of 25 years, including OEM production cuts, smartphone inventory depletion, AI and DeepSeek effects, and other factors will push up the demand for NANDFlash, thereby alleviating the oversupply situation, and is expected to usher in a price recovery in the second half of the year.

On March 10, the reporter contacted a number of A-share memory chip listed companies as investors.

Leading GigaDevice (603986. SH) told reporters that it is expected that the annual storage price will be stable, and the recent price increase of NAND products is mainly due to the reduction of production by overseas manufacturers such as Micron and Samsung, and the reduction of industry supply has led to price increases.

"After major overseas manufacturers cut their low-margin businesses, they have invested more energy and resources in sub-fields related to AI development, such as DDR5 memory chips, HBM and other high-end production lines." The above-mentioned GigaDevice related person told reporters.

BIWIN Storage(688525. SH) told reporters that the price of storage products represented by NAND is rising, which is good for the industrial chain as a whole.

"At present, the attitude of institutions towards storage prices in 2025 is 'bullish', and the transmission of price increases to the terminal can be regarded as positive." said the above-mentioned person.

Terminal demand determines the performance of listed companies

Since the beginning of this month, storage price fluctuations have been a hot topic in the electronics industry, and the market has had a heated discussion on whether the inflection point of storage prices has been reduced.

Huatai Securities released a research report at the end of last week, pointing out that storage prices are expected to usher in an inflection point in the middle of the year, and it is expected that the supply and demand pattern of NAND, DDR4 and other products is expected to improve in the second half of this year, consumer storage prices may usher in a rebound in the middle of the year, and enterprise-level storage prices will remain stable.

The inflection point of price and inventory in the semiconductor cycle has always been highly valued by investors. What is the impact of this round of storage prices on the operating performance of listed companies?

A TMT analyst told reporters that the original factory should pay attention to the acceptance of the downstream market after the price increase. "Due to the difference in inventory between each customer and the dealer, the dealer may give priority to the low-priced inventory after the original factory raises the price. The key is to look at the terminal demand, since the beginning of this year, the recovery of consumer demand such as PCs and mobile phones is still insufficient, on the one hand, it is caused by the consumer replacement cycle, on the other hand, there has been no breakthrough in the implementation of AI terminals, and the consumer-grade storage market is under obvious pressure. said the analyst.

A similar view was expressed by the head of a listed consumer electronics chip company. "The prosperity of the consumer electronics market is not yet confirmed, if the market of AI PCs, AI glasses, including AI headsets can really develop, the incremental demand for memory chips is quite large. IN ADDITION, WHAT IS NOW MORE EXPECTED IS WHETHER DEEPSEEK CAN BRING A WAVE OF LOCALIZED REPLACEMENT DEMAND. The above-mentioned person in charge said.

Judging from the memory chip performance report that has been released by A-shares, due to the significant differentiation of the performance of various companies due to the differentiation of downstream demand, GigaDevice is expected to increase its net profit attributable to the parent company by 36.6 times year-on-year, and the net profit growth rate will temporarily rank first.

The company said that it is expected that in 2025, the expansion of AI+ emerging consumer electronics terminals, smart cars, network communications and other fields will also contribute to new growth points; Juchen's revenue and net profit attributable to the parent company increased by 46.1% and 188.52% year-on-year respectively.

Long Lang (301308. SZ) expects that the net profit attributable to the parent company in 2024 will be at least 438 million yuan, compared with a loss of 828 million yuan in the same period last year.

Dongxin Co., Ltd. (688110.HK) SH), Hengshuo shares (688416. SH) increased revenue but did not increase profits, and the net profit attributable to the parent company continued to lose.

Since March, a number of listed memory chip companies such as Longsys, BIWIN Storage, Juchen Co., Ltd., and Montage Technology have been investigated by institutions. In terms of the development prospects of the storage market in 2025, listed companies are generally optimistic about the growth of demand in downstream fields such as servers and automobiles, and are cautious about the demand for AI devices that have not yet landed.

BIWIN Storage said that the new generation of information technologies such as the Internet of Things, big data, artificial intelligence, intelligent Internet of Vehicles, and metaverse is not only the demander of data, but also the generator of data. At the same time, the AI technology revolution will greatly increase the demand for high-end memory. At present, the localization rate of memory is low, and the localization rate of memory chips will be greatly increased with the two-way promotion of the market and policies, and the domestic storage industry has broad prospects.

Longsys said that looking forward to 2025, it is expected that the demand for servers and automotive specifications is expected to continue to grow. The accelerated penetration of AI technology in PCs, mobile phones, smart wearables and other fields is expected to usher in a new recovery in the consumer electronics market and further drive the demand for higher capacity and higher performance storage products.