According to a survey conducted by the semiconductor Research Office of TrendForce, it is limited by the full capacity of upstream wafer foundries such as TSMC and UMC, and the shortage of downstream packaging and testing capacity, including many NAND Flash companies such as Phison and Silicon Motion. Controller manufacturers are unable to respond to customers’ demands for additional orders.
In addition to suspending quotations for new orders, these controller manufacturers will face an increase in controller prices due to the critical period of price negotiation in the first quarter of 2021, with an expected increase ranging from 15% to 20%.
In addition, from the perspective of supply, thanks to the strong demand for chromebooks and TVs, the demand for eMMC low- and medium-capacity (including 64GB and below) products has increased. However, many original manufacturers have stopped updating such products, and only use 2D or 3D NAND. Older processes such as 64-layers have responded, and the proportion of old processes in the supply of the original factory has continued to decline.
Under the consideration of profit, the willingness of the original factory to supply directly decreases, which prompts customers to obtain the quantity from the module factory that can obtain NAND Flash components and controllers.
The price increase of the controller has caused the price of the module to rise at the same time, especially the chromebook products with the main capacity of 32 and 64GB.
Although the current overall NAND Flash market is still in a state of oversupply, the shortage of controller capacity makes the supply of medium and low capacity in short supply. The price increase of this component may lead to an increase in fixed costs, and OEMs and other purchasers will also be under pressure, which may lead to some high-demand capacity products (such as 32/64GB required by chromebooks) from module manufacturers in the first quarter of 2021. There may be a price increase.
In terms of SSD products, the supply is mainly from Samsung and other original manufacturers, and most of them respond to in-house products. They have a relatively long-term capacity arrangement with wafer foundries, and there is no reported price increase or shortage.
However, TrendForce also observed that the delivery time is prolonged, and the PCIe 4.0 generation products tend to increase the proportion of outsourcing manufacturers, which means that the future price trend will be affected by outsourcing manufacturers.