NAND Flash Revenue Down 2.3% in 4Q15 as Oversupply Led to Falling Prices

Estimated reading time: 6 minutes

Compared with the third quarter of 2015, SK Hynix’s fourth-quarter NAND Flash revenue fell by 9.3% to US$841 million. The South Korean memory supplier also saw a 4% bit shipment growth and a 15% slide in the average selling price. As tablet and smartphone shipments from strategic clients are expected to suffer a huge drop in the first quarter of 2016, DRAMeXchange projects SK Hynix to post a 10% quarterly decline in bit shipments as well.

With clients switching to TLC-based mobile NAND products, SK Hynix has raised the TLC ratio in its total NAND Flash output to 40%. The memory maker’s M14 fab, which is undergoing the second phase of its expansion, will be in operation in the second half of 2016 in order to meet this year’s 3D-NAND Flash demand. The mass production of 14nm TLC-based products will also begin in the same period.

Micron

Set against the previous fiscal period, Micron’s bit shipments for the first fiscal quarter of 2016 (from September to November last year) registered a 6% quarterly increase, while its average selling price dropped by 7% and unit cost fell by 6%. Micron’s revenue for the first fiscal quarter of 2016 therefore arrived at US$1.15 billion, up 1.9% from the prior fiscal quarter.

Micron currently is accelerating its efforts to make the transition to 3D-NAND Flash and have sent samples to module makers. Its newest fab in Singapore, 10X, is on schedule to begin mass producing 3D-NAND Flash in the second half of 2016. Micron’s product strategy for 3D-NAND Flash is focused on USBs and Client-SSDs. The memory maker has also developed its own brand of 3D-NAND Flash SSD products, which will be delivered to PC-OEMs for sampling this third quarter.

As for product mix, wafer and chip sales accounted for nearly 50% of Micron’s total revenue in the fourth quarter of 2015, while mobile NAND represented 15~20% and SSD brought in around 15%. The remainder came from automotive, telecommunications, and industrial memory products. However, the ratio of TLC-based products was around 10%, lower than previously expected. This was attributed to target customers showing stronger demand for MLC-based products used in Enterprise-SSDs.

Intel

Intel’s major Enterprise-SSD customers pulled inventory in advance during the third quarter. Consequently, Intel’s bit sales grew 10% quarterly in the fourth quarter of 2015. However, the oversupply in the fourth quarter resulted in a steeper decrease in the average selling price, causing Intel’s revenue fall slightly by 0.2% quarterly to US$662 million. 

The memory maker is currently carrying out the conversion of its Dalian fab in China from producing logic ICs to 3D-NAND Flash. The Dalian fab will begin doing small-batch runs of 3D-NAND Flash in the final quarter of 2016. Intel is also continuing its work on 3D XPoint. The testing of this next-generation memory technology will also begin in the fourth quarter of this year.