According to media reports, Kioxia, one of the major suppliers of NAND Flash, is planning to reduce its production in December 2024. This move is anticipated to halt the ongoing price decline of NAND Flash, and possibly even reverse it.

Market research firm TrendForce has noted the challenges facing NAND Flash in the fourth quarter, highlighting that Kioxia’s production cut could provide the market with a much-needed boost.

These reductions in output are expected to help address the issue of oversupply, particularly as the prices for enterprise SSDs are likely to stabilize as a result.

Furthermore, cloud service providers (CSPs) may redirect their capital expenditure towards enterprise SSDs as their data center expansions come to a close, which will significantly increase the demand for enterprise SSDs greater than 16TB.

In the short term, there is a projected decrease of 5% to 10% in both spot and contract prices for NAND Flash from one quarter to the next. Nonetheless, the market is anticipated to achieve a supply-demand equilibrium by 2025, driven by the collective effect of decreased production at original equipment manufacturers (OEMs) and ongoing strong demand for high-capacity enterprise SSDs in AI and general-purpose servers.

Revenue-wise, TrendForce data indicates that although global shipments in the NAND Flash sector saw a year-over-year decrease of 2% in Q3 2024, the average selling price climbed by 7%. This led to an overall increase in revenue to $17.6 billion, marking a 4.8% rise from the previous year.

During Q3, pricing trends for NAND Flash varied among different applications. There was a robust demand for enterprise SSDs which pushed the average selling prices up by nearly 15%, whereas customer SSDs experienced only a slight price increase due to fewer orders.