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The more working days in 2Q18 have brought higher demand for smartphones and notebooks, etc., but the increasing demand cannot offset the high supply resulting from improvements in 3D NAND Flash production capacity and yield rate, says DRAMeXchange, a division of TrendForce. Consequently, the suppliers, who face higher inventory levels, have to further adjust the eMMC/UFS prices downward.
DRAMeXchange points out that suppliers tend to decrease the prices of high-capacity UFS (128/256GB) in order to increase the average memory content of mid-to-high-range smartphones. The suppliers aim to encourage the memory content upgrade in models which currently carry 64/128GB eMMC/UFS. Overall speaking, the contract prices of eMMC may fall by 0-5% in 2Q18, while the price drop of UFS may become steeper, reaching 5-15%.
In 3Q18, the NAND Flash supply may see higher bit growth than 2Q18, but DRAMeXchange expects the supply to become tight as the arrival of peak season and Apple’s stocking up for new iPhones will jointly bring higher demand. Therefore the price decline may shrink to within 5%. As for the price trend of eMMC/UFS in 4Q18, DRAMeXchange believes that the prices will remain stable, but the sales situation of new iPhones will still shape the price fluctuations.
In terms of products, DRAMeXchange notes that mid-to-high–range AP products provided by major chip makers like Qualcomm and MediaTek all support UFS. Current suppliers include Samsung, SK Hynix, Toshiba, and Micron, etc. The penetration rate of UFS is considerable for smartphones of high-range or above, but remains weak for mid-to-high-range phones and mid-range ones.
Current mid-range smartphones mainly adopt eMCP, so how fast uMCP could replace eMCP will play a key role in increasing the penetration rate of UFS. However, as the demand remains unclear, AP suppliers tend to be conservative, showing insufficient support. In addition, phone users can hardly perceive the specs upgrade in daily use, which makes smartphone OEMs less willing to switch to uMCP. This has further delayed the suppliers’ product development of uMCP.
However, as major manufacturers are actively deploying 5G technology, which may require smartphones of better performance, more AP products will support uMCP in the second half of this year, and some of them will be applied to mid-range models. As the result, the penetration rate of UFS in smartphones will show significant growth in the next one to two years.
