On February 14, Western Digital (Western Digital) issued a price increase letter to customers: raw material pollution has led to the suspension of production in some of the company's production lines, and its costs have increased significantly in the short term, "will immediately increase the prices of all Flash (flash memory) products." Western Digital has not disclosed the extent of the price increase.
Western Digital and its production partner Che Xia are the fourth and second largest NAND flash chip factory in the world respectively, and their shutdown event will undoubtedly affect the nerves of the flash market.
Western Digital and Xia said last week that contamination of some of the materials used to make flash chips in late January led to the shutdown of two of their factories in Japan. Armor expects that shipments of traditional 2D flash memory will not be affected, 3D NAND flash memory is the main affected product, "hope to return to normal operation as soon as possible." **
Western Digital further said that the accident would reduce the production of 3D NAND flash memory by at least 6.5 exabytes. * * neither company has given an exact timetable for the full resumption of production.
Before the pollution incident, TrendForce Jibang Consulting, a research institution, estimated that the NAND flash market showed a slight oversupply in the whole year, and there was even downward pressure on the average price from the first quarter to the second quarter.
However, due to the significant impact of material pollution, TrendForce believes that the armor will not return to normal production until mid-March 2022 at the earliest, and has reassessed the price trend of NAND flash memory: its price decline is expected to converge to 5-10 per cent in the first quarter. Further, considering that the overall market share of Xia Xia and Western Digital is as high as 32.5% in the third quarter of 2021, under the influence of this event, the price of NAND flash memory is expected to decline to rise by 5-10% in the second quarter of this year.
It is also reported that Meguiar, a large memory manufacturer, issued a price increase letter on February 11. The price increase letter shows that due to the increase in the cost of microchips, Meguiar will start raising prices on March 1, 2022 and inform agents to convey to downstream customers, while the products of Meguiar's business unit will be affected by the price adjustment, with an average increase of 10%.
