Even though manufacturers continue to cut production, demand for servers, smartphones, and laptops has yet to pick up, leaving the NAND Flash market in a state of oversupply. TrendForce predicts that the average price of NAND Flash will continue to decline in Q2, with a quarter-on-quarter drop of 5-10%. The key to restoring supply-demand balance lies in whether manufacturers will further reduce production. TrendForce believes that if current demand does not continue to decrease, NAND Flash prices may stabilize and rebound in Q4. On the other hand, if demand remains weak during the peak season, the price rebound may be delayed.
Regarding Client SSDs, current PC OEM component inventory reduction has been effective, and preparations are underway for mid-year promotional events. As PCIe Gen 3 gradually phases out, manufacturers continue to lower prices to clear inventory, while PCIe Gen 4 products face pricing pressure due to slow customer project progress. Moreover, with QLC product prices dropping in Q1, TLC product prices are also affected, limiting the price decline in Q2. With demand yet to noticeably recover, Q2 PC Client SSD prices are expected to decrease by 5-10% quarter-on-quarter.
For Enterprise SSDs, benefiting from recent demand increases from Chinese cloud service providers and the ramp-up of AMD Genoa platform, Enterprise SSD shipments are expected to be boosted. Despite the oversupply situation causing Q2 prices to remain under pressure, NAND Flash sales are currently facing significant losses, leading suppliers to gradually reduce bargaining range. Q2 Enterprise SSD prices are expected to converge to a drop of 8-13%.
In terms of eMMC, small-capacity eMMC products have stable demand, while large-capacity products are affected by the weak laptop and smartphone markets. Under aggressive price competition from some module manufacturers, small-capacity eMMC prices faced significant pressure in Q1 and are unlikely to decline further in Q2. Meanwhile, large-capacity eMMC prices are linked to smartphone UFS prices, resulting in significant declines due to manufacturers' promotions. Overall, eMMC prices are expected to decrease by 5-10% in Q2.
As for UFS, manufacturers continue to promote large-capacity products to encourage customers to upgrade average storage capacity. The introduction of UFS 4.0 products also drives flagship device storage capacity higher. With smartphone component inventories returning to normal levels, companies are considering preparations for mid-year promotions and H2 peak season demand. TrendForce predicts that Q2 UFS prices will accelerate to the bottom, with a decline of approximately 8-13%, as suppliers become more willing to negotiate prices when buyers show increased purchasing interest.
Regarding NAND Flash Wafers, module manufacturers' inventory levels have gradually returned to normal. In anticipation of increased demand for SSDs, memory cards, and USB drives in H2, manufacturers aim to increase purchasing volume to establish low-cost inventory, avoiding absorbing price increases later. Manufacturers' efforts to slow down new process adoption and reduce wafer input to control bit output have been effective. With more manufacturers joining the production cuts to control oversupply, NAND Flash Wafer contract prices' quarterly declines are gradually converging. Most manufacturers that have implemented production cuts avoid further price competition to prevent increased losses when contract prices fall to cash costs. Therefore, Q2 NAND Flash wafer prices are expected to remain roughly flat compared to Q1.