December 5, 2024 /SemiMedia/ — According to reports, Japan’s Kioxia plans to reduce NAND output starting next month, according to reports. South Korea’s Samsung Electronics is also preparing to scale back production in an effort to stabilize prices.

This follows earlier reductions by SK Hynix, Micron, and Kioxia, which began selectively cutting output from the second half of 2022 through early 2023 due to waning demand. Samsung joined the trend later, initiating its own production cuts in April 2023.

Reducing production helps lower inventory levels and stabilize prices, with memory makers typically aiming for an inventory turnover period of 10 to 12 weeks.

Currently, only enterprise-grade SSDs used in data centers have maintained stable prices due to AI-driven demand, while other NAND products have seen significant price declines. Shrinking demand in smartphone and laptop markets has further pressured prices.

Data from DRAM Exchange reveals that after five consecutive months of price increases starting in October 2023, general NAND prices plateaued in March 2024 and began to decline in September. Month-over-month prices fell by 11.44% in September, 29.18% in October, and 29.8% in November. Prices have dropped from $4.90 in August to $2.16, marking a year-to-date decline of over 50% and the lowest level since August 2015.

TrendForce forecasts a decline in Q4 NAND sales revenue for Samsung and Kioxia due to weakened consumer demand, with Kioxia’s sales expected to drop by over 10% quarter-on-quarter.

“The downward trend in NAND spot prices is expected to persist,” TrendForce noted, adding that traders are increasingly concerned about potential losses as prices continue to plunge.