NAND flash prices are expected to fall at a slower pace in the second quarter of 2019 than in previous quarters, according to industry sources.
Industry leader Samsung has aggressively cut its NAND flash quotes in the first quarter aiming to accelerate inventory digestion in the supply chain, the sources noted. As a result of Samsung's price-cutting strategy, the industry inventory correction is about to come to an end between the end of March and early April, the sources said.
Samsung's aggressive price cuts are set to have a negative impact on other chipmakers' profitability in the first quarter, given that NAND flash prices have come close to cash costs for many manufacturers, according to the sources.
NAND flash prices have been sliding since 2018. Prices started falling dramatically in the fourth quarter of the year, due to growing uncertainty among server companies which have moved to defer their shipments or cancel chip orders, the sources indicated.
With Samsung lowering its quotes substantially, the NAND flash market prices have fallen even more in the first quarter of 2019, the sources said. Nevertheless, the price drops are expected to narrow to less than 10% in the second quarter, and may begin to rally in the third quarter when demand particularly that for servers picks up, the sources noted.