The spread of the coronavirus pandemic has dragged down considerably shipments for most end products in the first quarter of 2020, according to DRAMeXchange, which cut its NAND flash bit output growth forecast this year to about 30%.
NAND flash ASPs are still set to register another 5% sequential rise in the second quarter, but prices may start falling as early as the third quarter, said DRAMeXchange.
Demand for enterprise SSDs from cloud service providers in North America and China will result in an at least 5% rally in NAND flash ASPs during the second quarter, DRAMeXchange noted.
Meanwhile, system OEMs intend to scale up their inventory levels in the second quarter, amid worries about the coronavirus impacting major suppliers based in South Korea and China, DRAMeXchange said. "Vigorous price negotiations that are taking place in the contract market for NAND flash products are an indication that OEMs have double-booked some orders," the price tracker indicated.
In the spot and channel markets, prices have shown signs of weakening demand, according to DRAMeXchange. Prices for some branded SSD products have started falling, while prices for other NAND flash products grow just slightly. NAND flash wafer prices continue to rise, however, due to undersupply.
"The market dynamics could shift dramatically in 2H20 because the outbreak, which is now a pandemic, has expanded faster than anyone could imagine," said DRAMeXchange. "While NAND flash contract prices are expected to continue their rise during the first half of this year, there is now the possibility that their trajectory will curve downward in 2H20, or even 3Q20 at the earliest."