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The latest survey from DRAMeXchange a division of TrendForce, finds that increase in both SSD demand and average memory density of end devices will contribute to a 44% year-on-year growth of bit demand in global NAND Flash market in 2016. On the supply side, NAND Flash suppliers will step up their efforts in cost reduction and in development of 3D-NAND Flash to stimulate demand. Therefore, the global NAND Flash bit output for 2016 will also surge 50% year on year, based on DRAMeXchange’s estimation.
“Market supply will greatly exceed demand next year, causing sharper price decline,” said Sean Yang, DRAMeXchange research director. “Our forecast for 2016 indicates that worldwide revenue of NAND Flash industry will grow by just 0.2% year on year to US$26.6 billion. Suppliers are expected to face increasing pressure on their operating margins.”
DRAMeXchange foresees the following trends to influence the NAND Flash industry in 2016:
Industry’s attention will be focused on the progression of 3D-NAND Flash development
Next year will be a critical period for suppliers in terms of technology migration and product mix adjustment. The backend testing and assembly, in particular, will encounter a bottleneck as it tries to catch with the frontend wafer manufacturing, which adopted 15nm/16nm processes as the mainstream technology in the third quarter of 2015. Moreover, Samsung is already mass producing 3D-NAND Flash memory and has successfully used this technology to capture a share of the SSD market. Rival suppliers therefore are under pressure to speed up their 3D-NAND Flash development efforts. For next year, DRAMeXchange estimates that the NAND Flash industry will achieve around 16.7 million wafer starts (sized around 12-inch) in total, up 12% year on year. The acceleration in the development of 3D-NAND Flash will propel bit supply growth by a whopping 50% year on year, its highest in four years.
Yang also noted: “Though 3D-NAND Flash is expected to account for just 11% of the total NAND Flash output in the fourth quarter of 2015, the share will rise rapidly to 30% by the end of 2016. This in turn will lower the costs of SSDs, leading to an increase in the SSD adoption among OEM system vendors.”
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