TrendForce Forecasts a Possible Oversupply in NAND Flash Market in 2019


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Toshiba and Western Digital have reached an agreement on December 13th, 2017, after lawsuits and disputes over joint venture throughout the past year. The two companies have extended existing joint-venture agreement to 2029, which confirms that Western Digital will jointly invest in Fab 6 facility at Yokkaichi to secure its competitiveness in 3D-NAND Flash with 96-layer or greater. Soon after the agreement, Toshiba announced its Fab 7 construction plan on December 21st. According to DRAMeXchange, a division of TrendForce, the production capacity expansion of major NAND Flash manufacturers, e.g. Toshiba, Samsung, Intel, and Yangtze Memory Technologies Corporation (YMTC), will have increasing impacts on the industry, resulting in a possible oversupply in NAND Flash market in 2019.

Toshiba sets its previous memory factories at Yokkaichi, but proposes a new site for Fab 7 at Kitakami, Iwate. The schedule for mass production in Fab 7 will be forecast at the second half of 2019, and 3D-NAND Flash with 96-layer or greater will be the main products, says DRAMeXchange. But this new fab will not have large-scale influences on overall NAND Flash output until 2020.

Amid the trend of production capacity expansion in NAND Flash industry from 2018 to 2020, most manufacturers have taken steps to plan for expansion. Apart from Toshiba’s ongoing construction of Fab 6 and plan for Fab 7, YMTC is also a new focus of the industry. YMTC’s new site in Wuhan Donghu New Technology Development Zone will go into operation in the second half of 2018. With initial product development focusing on 32-layer 3D-NAND Flash, YMTC will also devote to the development of 64-layer products to narrow the gap with its competitors.

In addition to YMTC, other memory manufacturers also keep the pace. For instance, in response to thriving demand for server SSD, Intel is engaging in the second-phase expansion of its fab in the Chinese city of Dalian and aims to double the facility’s 3D-NAND Flash capacity by the end of 2018. Samsung will also expand its NAND Flash factory in Xi’an, increasing their production of 3D-NAND Flash in China. SK Hynix is investing a new factory, M15, in Cheongju, which also targets at production of 3D-NAND Flash with 96-layer or greater. M15 is expected to go into operation in 2019.

In summary, a series of expansion efforts by major suppliers may lead to a possible oversupply in 3D-NAND Flash market from 2019 onward, says DRAMeXchange. On the other hand, as the process technology transition continues, 2D-NAND Flash will remain a small portion of overall manufacturing output with a focus on industrial applications. As a consequence, 2D-NAND Flash market will see different prospects from 3D-NAND Flash in the future, and will turn to a niche market.

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