2019 was a fabulous year to be in the market for a NAND SSD, with prices falling due to a supply glut. This isn't at all unusual for the NAND flash industry, which typically alternates between boom and bust cycles as manufacturers first add capacity to respond to new market demand, than inevitably pause to allow demand to 'catch up.' For this reason, analysts expected NAND prices to rise in 2020.
That hasn't happened, even though predictions made as recently as June favored a price increase. The reason for the market uncertainty is because demand wasn't just dropping. It's been shifting across the market. The need for NAND in smartphones has been much lower than typical, while the market for PCs has boomed. Both Sony and Microsoft will be buying a lot of flash memory to support the Xbox XSX/PS5 launches, and there may even be an uptick in consumer sales if customers buy secondary drives to supplement console storage on launch day. No idea how strong the sell-through market on those add-ons will be, but we should see at least some motion.
What happened, specifically, is that demand for NAND wafers fell earlier this year while demand for SSDs(Opens in a new window) surged. Now, wafer demand is starting to recover, but PC demand is falling off. Consoles should soak up some of the difference, but there's also a memory manufacturer bringing new production online. YMTC is expected to hit maximum capacity utilization in one fab, while simultaneously bringing a second plant online. Trendforce writes(Opens in a new window): "Currently, YMTC has expanded the incorporation of 64L 256GB TLC products for its module maker clients; the average quoted price is far lower than contract prices and approaching spot market levels, in turn widening the decline in contract prices and exacerbating the oversupply situation in the market."
What this means in aggregate is that if you're going to be in the market for an SSD through the back half of the year, you should be in pretty solid shape -- though keep in mind that even when pricing changes, it doesn't necessarily directly impact what you'll see on store shelves. Those planning to buy a drive for an Xbox Series X/S or a PlayStation 5 may well benefit at least a bit, and I've heard from a source that SSD prices there have been falling rapidly. The US market may see a similar decline over the next few weeks. The decline is expected to be larger in Q4 than it is in Q3, but keep an eye on what real-world prices actually do -- there may be some good deals in the not-so-distant future.
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