It’s no secret that reminiscence pricing has crumbled over the course of the final twelve months. Prices for SSDs, and even RAM, are hitting the ground, and firms like Samsung, SK Hynix, and even Intel are beginning to really feel the crunch on their revenues. The latter simply wrapped up its Q1, 2019 earnings name, and CEO Bob Swan suspects the reminiscence worth crash is barely going to get extra extreme because the yr unfolds.
“Our conversations with customers and partners across our PC and data-centric businesses over the past couple of months have made several trends clear,” Intel CEO Swan says (through SeekingAlpha). “The decline in reminiscence pricing has intensified.
“We are additionally anticipating an incrementally tougher NAND pricing surroundings,” Swan remarks later within the name.
Intel’s Non-volatile Memory Solutions Group was down 12% for the final quarter, by far the most important proportion downturn for any of Intel’s divisions year-over-year. But NAND flash income accounts for solely $1bn of Intel’s income, drastically lower than its shopper and datacentre CPU companies handle to scrape by each three months. Samsung, nonetheless, is just not so fortunate, and its revenue has already plummeted 60% in Q1, 2019 – largely due to the worldwide reminiscence oversupply and worth crash.
To put that worth crash in perspective, SK Hynix, one of many world’s largest reminiscence fabs, skilled a drop in NAND’s common promoting worth of 32% in Q1 alone. The firm places the blame for the drop on excessive stock ranges and intensifying competitors amongst suppliers.
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It’s planning on shifting in the direction of know-how growth to mitigate its losses, and might be ditching older 36- and 48-layer 3D NAND merchandise in favour of 72- and 96-layer options. The Korean firm additionally plans on slowing the ramp-up at its newest fab, M15 FAB, in Cheongju.
“In the market where concerns over the uncertainty about memory demand and expectations for demand recovery coexist,” SK Hynix says in its Q1 financial press release. “SK Hynix will concentrate on cost reduction and quality assurance to secure its own competitiveness.”
IC Insights suspects the reminiscence market to be hit by a major downturn in 2019, with the full reminiscence market (DRAM and NAND) estimated to fall by 24%. That’s $38.6bn down the drain.
But players are capable of snatch up SSDs for cheaper than ever, and even system reminiscence has settled down from the colossal highs skilled at the start of 2018. So whereas this isn’t a good time for reminiscence producers, the market’s downturn is paying dividends to PC builders.
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