DRAMeXchange analysts argue that the continued spread of the COVID-19 pandemic has significantly weakened shipments of most end-products in the first quarter. However, major NAND flash memory suppliers have already reduced their capital expenditures for this year, which is why it is expected that the total NAND flash memory output in 2020 will grow by only 30%.
This will lead to an increase in the average price in the second quarter compared with the first by 5-10%. To a greater extent, it will be felt by manufacturers of corporate solid state drives.
According to TrendForce, manufacturers of final products are now seeking to stockpile components, fearing that the spread of coronavirus will disrupt the operation of the main NAND plants in South Korea and China.
At the same time, analysts believe that the dynamics of the market can change dramatically in the second half of the year, because the pandemic is spreading faster than one could imagine. It will lead to a further, more pronounced drop in demand. Given the fact that manufacturers will have significant stocks of components, a slight increase in contract prices for NAND in the second half of the year will now be replaced by their fall.