According to a new report, the effects of Samsung temporarily closing its fab in Austin, Texas, will soon be felt across the chip industry, playing a part in NAND flash prices rising 3-8% in the second quarter.
The extreme winter storm that hit Texas in February saw Samsung, NXP Semiconductors, and Infineon Technologies ordered to close their factories in Austin so power could be prioritized for people’s homes.
Interruptions to a fabrication plant’s power have affected product prices in the past, a result of the time it takes to get a factory back to 100% production levels. TrendForce says that with Samsung’s Line S2 fab still to resume full operations, “the supply of NAND Flash controllers going forward may be at risk, and Samsung’s ability to manufacture client SSDs will be further constrained as a result.”
TrendForce notes that in addition to the limited supply of NAND flash controllers, there is huge demand from notebook manufacturers—a result of stay-at-home orders—and production delays. This will exacerbate the tight supply of client SSDs, leading to predicted contract price increases of 3-8% in 2Q21.
The enterprise SSD market is expected to see demand rebound from “rock bottom” in the second quarter and stabilize, thanks to data center clients increasing procurement and “bids from Chinese telecom operators and increased IT equipment purchases from small and medium businesses globally.”
Continued NAND flash oversupply saw the price of enterprise SSDs fall 10-15% in 1Q21 while client SSD prices were down 5-10%. TrendForce expects NAND flash bit output to increase by up to 10% next quarter, with Samsung, YMTC, SK Hynix, and Intel expanding their production capacities.
Because of the limited NAND Flash controller supply, buyers are stocking up on products such as SSDs and eMMC, a trend that’s expected to continue for some time yet.