Shortage of NAND controller ICs impacting sales growth

Bit shipments rose by 11% QoQ, while the ASP dropped by 5% QoQ.

Although NAND  demand from notebook computer and smartphone manufacturers remained high, data centre clients showed weak demand with . contract prices for datacentre this showing a considerable QoQ drop.

OEMs/ODMs of end products began to increase procurement of NAND Flash products from the second half of January onward because they noticed that the shortage of NAND Flash controller ICs was affecting the production of medium- and low-density storage products.

Shortage of NAND controller ICs impacting sales growth

Besides avoiding a possible supply crunch in the future, OEMs/ODMs were placing additional orders because they were preparing for a push to expand market share. On account of these developments, the overall NAND Flash demand surpassed expectations in 1Q21.

In Q2, oversupply has turned into into a shortage and propelled quotes upward for the mainstream categories of NAND Flash products.

On the supply side, the shortage of NAND Flash controller ICs has worsened and resulted in a wider impact on the production of finished storage products.

On the demand side, clients in the data center segment and OEMs of enterprise servers are ramping up component procurement.

With prices rising and bit shipments growing, the quarterly total revenue is projected to register a QoQ increase for 2Q21.

However, in the long term, the continuation of the shortage of controller ICs may cause prices of NAND Flash wafers to drop first and eventually constrain further revenue growth..