Quote:That hasn’t happened, even though predictions made as recently as June favored a price increase. The reason for the market uncertainty is because demand wasn’t just dropping. It’s been shifting across the market. The need for NAND in smartphones has been much lower than typical, while the market for PCs has boomed. Both Sony and Microsoft will be buying a lot of flash memory to support the Xbox XSX/PS5 launches, and there may even be an uptick in consumer sales if customers buy secondary drives to supplement console storage on launch day. No idea how strong the sell-through market on those add-ons will be, but we should see at least some motion.

What happened, specifically, is that demand for NAND wafers fell earlier this year while demand for SSDs surged. Now, wafer demand is starting to recover, but PC demand is falling off. Consoles should soak up some of the difference, but there’s also a memory manufacturer bringing new production online. YMTC is expected to hit maximum capacity utilization in one fab, while simultaneously bringing a second plant online. Trendforce writes: “Currently, YMTC has expanded the incorporation of 64L 256GB TLC products for its module maker clients; the average quoted price is far lower than contract prices and approaching spot market levels, in turn widening the decline in contract prices and exacerbating the oversupply situation in the market.”

What this means in aggregate is that if you’re going to be in the market for an SSD through the back half of the year, you should be in pretty solid shape — though keep in mind that even when pricing changes, it doesn’t necessarily directly impact what you’ll see on store shelves. Those planning to buy a drive for an Xbox Series X/S or a PlayStation 5 may well benefit at least a bit, and I’ve heard from a source that SSD prices there have been falling rapidly. The US market may see a similar decline over the next few weeks. The decline is expected to be larger in Q4 than it is in Q3, but keep an eye on what real-world prices actually do — there may be some good deals in the not-so-distant future.

Quote:Phison Electronics and Silicon Motion, two leading designers of SSD controllers from Taiwan, cannot get enough chips from their contract manufacturers, according to a story from DigiTimes that corroborates with a report that TrendForce published earlier this week. The two companies reportedly 'stopped offering quotes for new orders' and are considering 10% to 15% price hikes for SSD controllers in Q1 2021. If SSD controllers get more expensive, this could somewhat offset the declines in 3D NAND prices that are projected to result in big savings for shoppers early next year.
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Both Phison Electronics and Silicon Motion traditionally focus on the so-called turnkey SSD solutions that include a controller, a firmware, NAND memory, and production service. Essentially, both companies sell entire SSDs that can be customized by their customers. If they increase quotes of the whole SSDs, then contrary to expectations of TrendForce, SSDs will get more expensive in Q1 2021.

However, if the price hikes will only affect controllers, then SSDs might still get cheaper next quarter; SSD controllers are a small part of the overall cost of a drive, while flash comprises the bulk of the build of materials.

Traditionally, when a company increases its prices, it affects the prices of entry-level products first as they are sold at a low margin. In contrast, high-end products, such as SSDs with a PCIe 4.0 x4 interface, will either get significantly cheaper or more expensive in Q1 2021 due to cheaper NAND or more expensive controllers.

Neither Phison nor Silicon Motion commented on the report.

Quote:In the upstream semiconductor industry, the major foundries such as TSMC and UMC are reporting fully loaded capacities, while in the downstream, the available production capacity for OSAT is also lacking, according to TrendForce's latest investigations. Given this situation, suppliers of NAND Flash controller ICs such as Phison and Silicon Motion are now unable to meet upside demand from their clients. Not only have many controller IC suppliers temporarily stopped offering quotes for new orders, but they are also even considering raising prices soon because the negotiations between NAND Flash suppliers and module houses over 1Q21 contracts are now at the critical juncture. The potential increases in prices of controller ICs from outsourced suppliers (IC design houses) are currently estimated to be the range of 15-20%.
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TrendForce points out that even though the whole NAND Flash market is still in oversupply right now, medium- and low-density eMMC solutions will likely experience price hikes as they are in tight supply due to insufficient output of controller ICs. An increase in prices of controller ICs will result in a corresponding increase in the fixed costs of eMMC solutions. This, in turn, will put pressure on OEMs that are procuring components. With this scenario now becoming a reality, prices of those eMMC solutions that are in high demand could rise slightly in 1Q21. Examples include 32 GB and 64 GB solutions for Chromebook devices.

In the SSD market, the major NAND Flash suppliers such as Samsung are also the major device manufacturers. Most SSD manufacturers have in-house controller ICs that are made at foundries under long-term agreements. Hence, there have been no reports of price hikes or shortages for SSD controller ICs. However, TrendForce has observed that lead time has been prolonged for SSD controller ICs as well. Additionally, the share of SSD controller ICs that have been outsourced to IC design houses has increased for SSDs with PCIe 4.0. In the future, there is an increasing possibility that prices of SSD controller ICs will be affected by the statuses of outsourced IC suppliers.