The main reason why NAND chips continue to rise

In the past six months, the quotation of NAND chips has been on the rise, and the market price has been increasing. According to market rumors, this increase is expected to continue before the end of the year, and the accumulated increase is even expected to be as high as 60%, which will be a gratifying profit feast for storage chip manufacturers. After the downturn in the second half of 2022 and the first half of 2023, NAND Flash reversed the market in the second half of 2023. Contract prices began to rise quarter by quarter, with an increase of even double-digit percentage. This strong rebound is due to the joint efforts of major memory manufacturers such as Samsung, Micron, SK Hynix and Kioxia to reduce production, leading to a reduction in market supply and driving prices to stabilize and show an upward trend.

As we enter 2024, the upward trend of NAND Flash is still ongoing. According to the latest report from research institution Trendforce, the price of NAND Flash in the first quarter of this year is expected to rise by 18% to 23%, and the contract price in the first half of the year is expected to increase quarter by quarter. In this situation, industry insiders generally predict that Taiwanese manufacturers such as Winbond, Adata and Phison will achieve considerable performance growth in the prosperous market atmosphere.

Industry analysts believe that the effective implementation of production reduction strategies by major memory manufacturers has created favorable conditions for the market. At the same time, the gradual popularization of AI applications is also a key factor driving market demand. AI applications have expanded from data centers and servers to various fields, including smartphones, personal computers, and terminal devices for the Internet of Things. This means that the storage capacity of these devices is expected to further increase, thereby stimulating the growth of NAND Flash market demand. It is particularly noteworthy that the demand for higher capacity from AI applications will become one of the main driving forces in the future market.

At the same time, as users' reliance on image-based AI applications increases, the storage demand for photos and videos is also correspondingly increasing. This trend not only provides additional growth momentum for the NAND market, but also drives manufacturers to accelerate the launch of higher capacity and higher performance NAND chip products.