Solid-state drive manufacturers have increased their demand for multi-level NAND flash memory, causing NAND manufacturers to increase production of MLC chips. As a result, chip producers have cut back on triple-level NAND (TLC) production, which is used in a majority of memory cards. Pricing for cards is anticipated to go up while NAND will not increase proportionally.
This month, chip manufacturers Samsung and Toshiba/Sandisk increased their MLC demand to fill OEM orders on eMMC and SSD products. Because of this, TLC contract prices augmented 1-3% to compensate for a shorter supply. 20nm chips designed for SSD applications are consuming most of the MLC NAND that is built because these OEMs have first crack once the chips come off the line. Fortunately, contract prices on MLC are forecasted to remain stable through mid-March.
Typically Q2 brings along a weakened demand for tablets and smartphones, which will be appear even more discernible than Q1. However, as improvements in reliability and yield rate for 20nm NAND continue to accelerate, shipments should catch up with demand in early 2Q13. The SSD and memory card shortages should minimize by then and contract prices could potentially decline as early as the end of March.