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© 4designersart dreamstime.com Analysis | June 21, 2016

Power outage at Samsung’s Xian Fab adds fuel to NAND Flash market

The latest NAND Flash price report from DRAMeXchange, a division of TrendForce, finds prices of TLC wafers and spot prices of mainstream memory cards have been on a steady rise for three consecutive months since this April.
The uptrend will continue as the possibility of the market encountering tight supply in the third quarter becomes more apparent. The margin of price increase has also been getting larger over the past month.

“NAND Flash suppliers are reducing their shares of shipments going to the channels in order to satisfy the demand from the eMMC/eMCP and SSD application markets,” noted Sean Yang, research director at DRAMeXchange. “At the same time, they are also accelerating their migration to 3D-NAND technology. Hence, the overall output for planar (2D) NAND products is declining, and this in turn further limits supply in the spot and retail markets.”

DRAMeXchange forecasts rising prices for TLC wafers and spot-traded memory cards in the third quarter. Afterwards, the sales performances of the next-generation iPhone and other newly released branded smartphones will guide the NAND Flash market in the fourth quarter.

Power outage at Samsung’s Xian fab will reinforce the expectation of tight supply in third quarter

The latest news of disruption to plant operations at of Samsung’s fab in Xian, China also adds another new variable to the NAND Flash market. On June 18, an explosion occurred at an electrical substation in the Chinese city, causing power outage at Samsung’s fab for a few seconds. Some of the plant’s capacity was restored on the same day after emergency repair and damage assessment. Samsung’s Xian fab, which is totally devoted to the advanced 3D-NAND memory for SSDs, has a production capacity of 100,000 wafers per month under normal operation.

Yang believes the partial but rapid recovery of the fab capacity will have limited impact on Samsung’s NAND Flash output in the long run. Ramping up the production and enlarging the scale of capacity expansion can offset the losses for Samsung if the number of damaged wafers in process was under 10,000 pieces. On the other hand, this unexpected event will also intensify the anticipation of a supply shortage in the third quarter.
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More information can be found at Trendforce.

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