Will the storage market start a new round of price increase cycle?

A few days ago, Sandisk (SanDisk) issued a price increase notice letter showing that Sandisk plans to increase the price of all products for channel and consumer customers from April 1, an increase of more than 10%.

A memory card channel provider from Shenzhen confirmed the above price increase news to the reporter of China Business News, and told the reporter: "Now the entire memory card market is rising. ”

According

to TrendForce's latest spot price trend report on March 12, the spot market for NAND Flash wafers continued to increase in price. Due to the continuous production control of suppliers, factories received lower than expected inventory, resulting in a reluctance to sell on the spot supply side and rising quotations. The price of wafers may continue to rise in the future, and the spot price of 512GB TLC wafers rose 2.33% to $2.5 during the week (March 5 to March 11).

Some industry insiders believe that with the price increase of leading enterprises in the storage industry, the price of the memory industry is expected to rise. However, some people in the industry believe that this wave of storage price increases is mainly due to the increase in wafer and module prices caused by the original storage wafer factory's production reduction and adjustment capacity, and the overall price recovery of the industry still needs to observe the demand-side market situation.

Sandisk took the lead Samsung, SK hynix or follow up with price increases

Starting from the third quarter of 2023, the storage industry has entered a price increase cycle by controlling production and price increases by controlling production and price increases, superimposed on factors such as the gradual recovery of downstream and the heating up demand for high-performance storage. By the fourth quarter of 2024, the supply and demand of flash memory will reach an oversupply, and the demand of traditional consumer customers will continue to weaken, and storage prices will also turn to decline quarter-on-quarter.

According to previous data from TrendForce, in the fourth quarter of 2024, as consumer electronics manufacturers such as PCs and smartphones continued to destock, the supply chain significantly adjusted purchase orders, causing the price of NAND Flash to reverse downward. The average selling price of NAND Flash in the quarter decreased 4% quarter-on-quarter and decreased 2% overall, and industry revenue was $16.52 billion, down 6.2% from the third quarter.

Among the major NAND Flash brands, Samsung, SK hynix, Kioxia, Micron and Western Digital (SanDisk) have all been affected to varying degrees. In the fourth quarter of 2024, Samsung's revenue decreased by 9.7% quarter-on-quarter due to weak demand for consumer electronics; SK Group's (SK hynix and Side) revenue decreased by 6.6% sequentially; Kioxia's revenue decreased 0.2% sequentially; Micron's revenue for the quarter decreased by 9.3% quarter-on-quarter; The Western Digital/SanDisk earnings report also showed that the year-on-year growth rate of the flash memory business has slowed down since the third quarter of 2024.

However, the flash memory product market is about to start a new round of price increases?

Recently, SanDisk fired the first shot of price increases for flash memory products, and it issued a price increase notice letter saying that it plans to increase the price of all products for channel and consumer customers from April 1, with an increase of more than 10%.

SanDisk explained the price increase in the notification letter, saying that the memory chip industry will soon transition to a state where supply exceeds demand, which, combined with recent tariff changes, will affect the availability of supply and increase Sandisk's business costs. As a result, it was decided to implement a price increase of more than 10% from April 1 and apply to all products for both channel and consumer customers. At the same time, frequent pricing reviews will continue, with additional increases expected in the coming quarters.

In addition, SanDisk said, "Our ability to respond to unplanned demand and orders is limited, so make sure to communicate any changes to orders as early as possible." Any unplanned demand is expected to extend lead times. ”

Memory is the most important segment of the semiconductor market, which is mainly divided into flash memory and memory, flash memory includes NAND Flash and NOR Flash, and memory is mainly DRAM. DRAM and NAND Flash are currently the mainstream semiconductor memories, accounting for more than 95% of the market size and are an important part of the global memory market.

On February 24, 2025, Western Digital announced that it has officially completed the spin-off of its hard disk drive (HDD) and flash memory businesses, and will become two completely independent companies. Following the spin-off, Western Digital will continue to focus on the HDD business, while SanDisk will take over the NAND Flash and solid-state drive (SSD) businessesThis also means that the price of flash memory products such as SD cards, USB flash drives, and solid-state drives under SanDisk will increase.

At the same time, storage giants such as South Korea's Samsung and SK hynix are also likely to follow suit with price increases. According to industry insiders, the two companies also intend to raise the price of NAND next month.

According to TrendForce, Western Digital's share of the NAND Flash market in the fourth quarter of 2024 was 11.4%. Samsung and SK hynix have market shares of 33.9% and 20.5%, respectively, and if these two Korean companies decide to follow up with price increases, the overall market price is expected to be pulled up.

Recently, a number of flash memory brand channel providers confirmed the price increase of memory card products to reporters. A channel dealer representing Kioxia, SanDisk, Kingston, Samsung and other international flash memory brands told reporters: "Now the entire memory card market is rising. ”

A channel provider of Jintaike also told reporters that the prices of D4 solid-state (representing higher-performance solid-state drives) and D5 solid-state (higher-density, lower-cost storage solutions) have been raised recently.

Designers pay attention to market demand

The reporter also contacted a number of A-share storage listed companies as investors.

Storage module manufacturer BIWIN Storage (688525. SH) said: "You can refer to the flash memory market channel data, the prices of some product industries have stabilized, and the prices of some products have also rebounded, and the company's storage products are on the market and dynamically adjusted." Shannon Xinchuang (300475. SZ) also said: "Storage can basically be regarded as a commodity in the semiconductor industry, and it is recommended to pay attention to industry prices." ”

The memory chip manufacturer GigaDevice (603986. SH) Investor Relations Department responded: "The company's products have not increased in price, and the price remains stable. Regarding the future price situation, the person said: "We need to continue to observe." "Puran shares (688766. SH) said that the price of the company's NOR Flash products has not risen, and it is still at a historically low price, and it will rise in the future, but the repair time of the rise is not clear, the company belongs to the memory chip design company, and the price still depends on market demand.

The reporter inquired about the CFM flash memory market network and learned that recently, the prices of MicroSD, USB2.0, USB3.0, and some SSD product channels (256GB PCIe 3.0, 512GB PCIe 3.0) have risen.

Some people in the storage industry analyzed to reporters that the storage products in this wave of price increases are mainly the products of large-capacity module manufacturers and enterprise SSD companies, and the price increases are mainly regulated by overseas wafer manufacturers through capacity control. However, the price of memory chip designers such as NOR Flash has not been affected.

In fact, in response to market changes, Samsung and SK hynix implemented production cuts as early as the fourth quarter of 2024, with Samsung cutting NAND flash memory production at its Xi'an plant by more than 10% in the first quarter of 2025, and reducing production at Hwaseong 12 and 17 production lines in South Korea to further reduce overall production. This move has effectively improved the imbalance between supply and demand in the market and accelerated the process of price bottoming. Huaan Securities research report also shows that the storage price increase is mainly due to the fact that Samsung, Hynix, Micron, Western Digital and Kioxia's five major wafer manufacturers will begin to reduce NAND production in the fourth quarter of 2024, and the effect of the reduction is expected to begin to be reflected in the second quarter of 2025.

From the perspective of production capacity, the measures of upstream production control and price increase have shown results in the near future.

According to the analysis of the research report released by Huaxin Securities on March 4, the spot price of SK hynix's DDR5 and eMMC memory chips rose in the same week, and the spot transaction price of DDR5 SK Hynix 2Gx8-5600 particles has risen to $4.70, and the eMMC market is trading lively, with 4G/8G/16G eMMC rising by 8%~10%, and the market quotation has been higher than the official price of the original factory, and the factory side is still constantly raising the target price to strive for bargaining space.

Previously, TrendForce also analyzed that the market situation in the first quarter of 2025 is still not optimistic, although wafer suppliers have actively reduced production, due to the impact of the traditional off-season effect, the stocking speed of terminal products such as servers has slowed down, and it is expected that the overall industry revenue of NAND Flash in the first quarter may decrease by as much as 20% quarter-on-quarter. With the promotion of production reduction measures and the gradual bottoming out of prices, the industry is expected to return to the upward trajectory in the second half of the year.

However, with the price increase of some flash memory products in the market, does it mean that the entire flash memory price is expected to return to the upward trajectory in advance?

In this regard, Ao Guofeng, research manager of TrendForce, told reporters that customers have been actively increasing their purchases since March due to the market's expectation of possible price increases in the second half of the year. TrendForce believes that this move will help prices recover early, especially as the contract price of NAND Wafer in the second quarter is expected to stop falling and rebound.

It remains to be seen when the demand side will be able to drive up storage prices. However, recently, a number of domestic listed companies have also talked about the development outlook of the storage market demand when they were surveyed by institutions. Long Long(301308. SZ) said that looking ahead to 2025, continued investment in AI hardware by cloud service providers will drive demand growth for high-performance computing and storage hardware. With the deepening of the integration of AI large models and intelligent terminal devices, the demand for single-machine storage capacity has increased significantly, and the medium- and long-term storage market may usher in growth opportunities.

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.