Throughout 2018, the electronic component supply chain witnessed various shortages and market swings. As the shortages subsided, their aftermath brought various oversupply situations for several types of components, such as the recent emergence of the NAND flash oversupply market condition. Considering NAND flash prices reached a low point in 4Q18, the new question is: what will the NAND flash market’s future hold for the remainder of 2019?
Generally, smartphone devices drive NAND flash component sales, as they consume 35% of all NAND flash production. Smartphone shipments increased with an average 16% growth rate annually between 2012 and 2017, however, a recent drop in demand for smartphones during the 2018 holiday season has caused a 16.8% decrease in 4Q18 NAND flash revenue.
Despite NAND flash’s recent performance, it’s outlook for the future remains promising. To start, in 2Q19, NAND flash memory prices are expected to fall at a slower pace. According to IHS Markit, the NAND flash memory market is estimated to grow at a compound annual growth rate (CAGR) of 4.9% between 2017 and 2022, with the Asia-Pacific region playing a large role in the component’s continued growth. Contributing factors to NAND flash’s potential success include the anticipated strong growth in the 5G and IoT segments.
Additionally, there have been new developments within the flash memory market with improved technology and advanced features. Many component manufacturers have their eyes set on expanding global output of the new 96-layer 3D NAND flash beginning in 2Q19. These memory components bring both faster data writing and movement speeds within end products.
During oversupply situations, smart practices and reliable partnerships are key to take the necessary steps towards effectively handling excess inventory and taking advantage of price differences. Being a global distributor for over 40 years, Advanced MP Technology has successfully served as a strategic supply chain partner to many OEM and EMS companies who have faced the economic strain that comes from oversupply market conditions. Using our customized inventory management services, Advanced MP Technology has provided various supply chain solutions to many global manufacturers. If you are facing a potential problem with NAND flash, contact Advanced MP Technology today and our resourceful staff will help mitigate your excess inventory and regain financial return.