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Oversupply will cause NAND Flash prices to drop further throughout 2018, according to analysts

Last week, reports cropped up claiming that a DRAM oversupply is inbound, set to reduce the cost of components throughout the next year. It looks like the same can be said for the NAND Flash market, as analysts predict a 10 percent drop quarter on quarter throughout Q3 and Q4 2018.

NAND Flash prices have been steadily declining since April, after DRAMeXchange documented a slight oversupply that affected prices going into Q2 2018. Now the TrendForce-owned firm has determined that this will continue into late 2018, going against the traditional peak pricing for seasonal months.

As supply of 3D NAND Flash has expanded, the growth of the end market has been decidedly weaker than anticipated, resulting in a much greater number of stock. The primary reason for this seems to be the stagnation of the handset market, with internal specifications often looking nearly identical to one another.

“First, the annual shipments for smartphones this year are expected to be just on par with last year's. The replacement demand for smartphones has been sluggish due to the lack of differentiation among products in terms of hardware specifications,” the analysts said. “Second, notebook shipments were very strong in [the first half of this year], so the seasonal shipment growth for notebooks in [the second half] will be lacklustre compared with the growth in the year's first half as the base period.”

The same cannot be said for the server SSD market, which has spiked in profitability over the past couple of years. Unfortunately for companies, this has resulted in an overwhelming amount of competition, causing “an oversupply of server SSDs because too many suppliers are engaging in this profitable segment,” according to DRAMeXchange. Fortunately for consumers, the subsequent drop in SSD prices should see notebook manufacturers increase the SSD adoption rate by 50 percent before the end of the year.

“Since the market outlook for the 2H18 has become more certain, DRAMeXchange now anticipates continuing price decline during the traditional slow season of 1H19,” concludes the TrendForce press release. “Meanwhile, most suppliers are working to make the transition from the 64/72-layer architecture to the 96-layer. This ongoing technology migration is expected to increase the overall output and keep the market in oversupply.”

KitGuru Says: This is a good sign for those who have been waiting to get their hands on newer, faster storage devices. Seems like forever since I’ve been able upgrade, so I might just get a faster SSD. Have you been eyeing up any new hardware as prices are declining?

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