This year, the third quarter was not associated with an upturn in business activity, and demand for solid-state memory continues to remain low. At the same time, manufacturers do not have time to proportionally reduce production volumes, and prices for NAND memory chips in the contract market, according to experts TrendForcein the second half of this quarter may fall by all 30-35%.
This is much more than originally planned. Previously, TrendForce analysts included in their forecast a decrease in prices in the futures market ranging from 15 to 20%. Decline in demand for consumer electronics, according to the authors of the forecast, next year will force manufacturers of flash memory chips to increase their activity to capture market positions. It will no longer be possible to increase revenue only by increasing production volumes, since the market is oversaturated with this type of product.
In the second half of this year, if manufacturers do not decide to reduce the production of memory chips, a further fall in prices may contribute to a new wave of consolidation. Large producers will try to absorb smaller ones. It is becoming more and more difficult for small companies to master new technologies for the production of memory, as the need for capital expenditures grows.
Now market participants are focused on holding their positions, so elements of a price war will continue to undermine their financial performance. In the fourth quarter, according to TrendForce, prices for solid-state memory could fall by another 20%, and the trend has a chance to continue into the first quarter of next year. Prices will decrease not only in the contract market, but also in the segment of instant transactions.
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