Flash Memory Pricing has Plummeted and is Difficult to Grow in the Short Term
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Update time : 2022-09-15 11:27:54
It is reported that when Western Digital announced its earnings for the quarter ended June, it had estimated revenue of $3.6 billion to $3.8 billion and non-GAAP earnings per share (EPS) of 35 to 65 cents for the quarter ended September, well below original expectations. The current Wall Street consensus is for revenue of $3.7 billion and adjusted EPS of 49 cents.
While Goeckeler did not specifically revise the figures, he said the company saw a sharp drop in pricing for NAND flash memory last month. He added that the pricing decline was also accompanied by lower demand for NAND units. In addition, Goeckeler said the company may delay the construction of its next NAND manufacturing plant.
Wissam Jabre, Western Digital's chief financial officer, said the company's previous target of positive free cash flow for the June 2023 fiscal year is now "more difficult to achieve," with the fiscal year threatening negative free cash flow and the September quarter also threatening negative free cash flow.
According to data, DRAM and other flash memory prices recently hit a new low for seven consecutive quarters. The main reason for the price weakness is that shrinking personal PC shipments are pulling down the price of some storage chips or components such as NAND flash memory.
Observed in recent months, due to the impact of the epidemic and other multiple factors, most companies are facing a "dilemma" situation, on the one hand, the market's purchasing power is increasingly weak, while the product and foundry services to increase prices. Personal PC, for example, according to market research agency IDC statistics show that from April to June this year, the global supply of PC 71.3 million units, down 15.3% year-on-year. Among them, Lenovo supply decreased by 12.1%, down to 17.5 million units. HP decreased by 27.6%, and Dell also decreased by 5.3%.
In late July, South Korean storage giant SK Hynix also announced an indefinite postponement of its South Korean factory expansion plan due to low market demand. The South Korean storage giant had planned to start construction of a new plant called "M17" on a 430,000-square-meter site adjacent to the existing plant in 2023, and put it into operation in 2025.
Samsung Electronics also previously announced the "elasticity of supply and demand to carry out equipment investment" policy, the company's 2022 January to March semiconductor investment amounted to 6.7 trillion won, 21% less than the same period last year, halved from the previous quarter.
Sanjay Mehrotra, CEO of Micron Technology, also made it clear at the earnings announcement in June that “investment in equipment in fiscal 2023 (as of August) will be reduced by ...... compared to the previous fiscal year to prevent oversupply.”
