Delkin Blog

Unprecedented conditions in the NAND market are causing prices to rise and lead times to stretch, as increased demand combines with supply issues.  At this point, no significant relief is expected before the end of 2017.

There are multiple factors at play leading to worldwide dramatic growth in flash demand.  New generations of mobile devices have double the NAND capacity, to support more features, applications and personal storage, and there has also been an increase in demand from Chinese smartphone manufacturers.  SSD adoption in PC’s and notebooks exceeded 30% for the first time in 2016, and flash technology is increasingly deployed in datacenters.  As SSD capacities have risen, the cost competitiveness with HDD’s has improved, to continue driving the conversion. SSD sales are predicted to top 173 million units in 2017, up from 142 million in 2016, with projected 22.6% increased capacity.

The supply issues that are complicating the market are largely due to the transition that is occurring in the industry, right during this time of dramatically increased demand – from linear (or 2D) NAND to 3D NAND.  Flash manufacturers are not expanding their current NAND facilities, but investing a large account of CAPEX into the new 3D technology.  While 3D will ultimately represent increased densities and endurance in a larger geometry, there have been significant challenges. Difficulty in improving yields and ramping up production has resulted in shortages of both 3D and linear NAND.

THE GOOD NEWS

The shortages, price increases and longer lead times generally apply to MLC and TLC NAND flash.  The market for SLC NAND utilized in most Delkin Industrial products is very stable – with consistent lead times and pricing, along with life cycles planned by most suppliers through at least 2020.  While SLC flash does come at a price premium, it is favored among many Industrial and embedded customers, due to the inherent high endurance, reliability, performance and long life cycle.  Delkin does not expect any significant changes in the SLC NAND flash market in 2017.