Tuesday, February 4, 2020
Despite market observers' concern about China's coronavirus outbreak dampening consumer demand in the first quarter, Adata Technology chairman Simon Chen is still optimistic that the prices of DRAM and NAND flash will continue picking up later.
Chen expects demand for memory to resume growth by May or June if the outbreak can be effectively contained.
Sales from physical stores are expected to be undermined by the outbreak in the first quarter, but the losses will be covered by the dramatic growths from online shopping platforms, said the chairman of the Taiwan-based memory module firm.
NAND flash prices have been rising since the fourth quarter of 2019 and have so far grown around 30-40%.
Since China has recently extended the Lunar New Year holidays with some provinces to mid February as a way to contain the spread of the virus, memory module firms which were originally expected to enjoy strong order pull-ins after the holidays are likely to see their shipment momentum delayed.
At the moment, DRAM and NAND flash spot prices have not changed much, but are likely to drop after the market begins trading in the next few days.
At the end of 2019, Adata's monthly revenues from solid state drive (SSD) products more than doubled on year and accounted for over 30% of the company's overall revenues. As datacenter firms have begun restocking inventory and demand from 5G handset brands and PC users switching from HDD to SSD starts rising, NAND flash may begin to experience tight supply as early as in the first half of 2020.
Meanwhile, Korea-based SK Hynix plans to cut its capex for 2020 due to concerns about uncertainty in the market. SK Hynix's capex already went down 25% on year to KRW12.7 trillion (US$11.43 billion) in 2019.
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