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Analysts Say We Are Headed For a Flash Memory Price Crash (techspot.com)
With the industry currently facing a very large surplus of NAND flash memory, analysts suggest we could see very significant price drops in SSD and even DRAM in 2019. They say to expect a price correction over the next several quarters. Techspot reports: Jim Handy, a market analyst with Objective Analysis, predicts that the flash memory industry is headed for a "downward pricing correction" in 2019, if not a full-on collapse. If prices crash, we could be looking at NAND prices as low as eight cents per gigabyte. At last week's Flash Memory Summit, Handy said that even without a full collapse, the downturn will be the biggest "price correction in the history of semiconductor products."
The Register reports that currently, NAND flash prices are hovering around $0.30/GB. A 66-percent dip would bring SSDs into a more competitive range to HDDs causing cannibalization leading to a downturn for some manufacturers like Seagate and Western Digital. Manufacturers could allocate more NAND to producing DRAM, but this, in turn, would result in an oversupply in that sector. If Handy's predictions pan out, the industry could be in for a 25-percent price reduction in NAND and a 75-percent drop for nearline/high-cap SSD's. This could result in significant stock valuation shifts for some manufacturers.
The Register reports that currently, NAND flash prices are hovering around $0.30/GB. A 66-percent dip would bring SSDs into a more competitive range to HDDs causing cannibalization leading to a downturn for some manufacturers like Seagate and Western Digital. Manufacturers could allocate more NAND to producing DRAM, but this, in turn, would result in an oversupply in that sector. If Handy's predictions pan out, the industry could be in for a 25-percent price reduction in NAND and a 75-percent drop for nearline/high-cap SSD's. This could result in significant stock valuation shifts for some manufacturers.
It wasn't collusion. Moving production from planar to 3D NAND caused supplies to be limited as bit-demand was increasing. The transition to 3D NAND is set to be largely complete, but bit-demand isn't accelerating at current price points.
Supply will increase, prices will drop, bit-demand will go way up. Prices will stabilize. NAND storage for all at reasonable prices.
Margins at producers will fall, but not far enough for long enough for them to intentionally idle production.
Fabs mostly can't switch over to DRAM production. They aren’t technologically similar. And there are only 3 DRAM producers versus 6+ flash producers. Barriers to entry for competitive DRAM production for new producers are astronomically high.
Spinning platter drives have been the same price per Gb for a decade.
Only the State obtains its revenue by coercion. - Murray Rothbard
I disagree with TFA on that. The 3 DRAM makers have shown a very rational approach to increasing DRAM production — they try to prevent oversupply and keep margins up. They don’t have an incentive to change, and even if they did, the new generations of DRAMs are technologically very challenging to make, and DRAM bit density isn't growing very fast.
SK Hynix just announced they are spending $3B on a new fab:
https://www.anandtech.com/show...
If NAND is in vast oversupply and it's reasonable to simply convert NAND production to DRAM, then why build new fabs? Answer: because the combination of those two things isn't true enough to make that decision economical.