Research firm WebFeet Research predicts that the NAND market will be $34.6 billion in 2023, down 43% from a year earlier. The reason lies in the simultaneous drop in demand for servers, laptops and smartphones. Although there are still many unknowns in this equation, for example, it is not entirely clear what impact the AI boom will have on the flash memory market. Analysts expect stabilization by the end of the year, but the risk of negative surprises remains.
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Despite sluggish demand for PCs in the first half of 2023, NAND suppliers are hopeful that the measures they have taken to reduce production will help reduce high inventory levels. Many flash memory manufacturers are in a difficult position due to a strong drop in NAND revenues, despite strong support from their governments.
South Korea, protecting the national interest, will not allow Samsung or SK hynix to collapse in the flash memory segment. Kioxia is under the protection of Japan, and also cooperates with WD. Micron’s earnings dropped significantly and the company cut back on memory production. YMTC has faced technology sanctions but has made some progress with the release of 232-layer 3D NAND. It is not known how long the support for the Chinese government will last.
In Ernest Hemingway’s The Sun Also Rises, Mike is asked how he became bankrupt. “Two ways,” he replies. Gradually, then suddenly. The question arises whether the industry is gradually slipping into a recession or whether a sudden collapse in production should be expected.
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