Amid falling demand for SSD memories, Kioxia has announced that it will reduce production of its 3D NAND chips at several different factories.
This memory manufacturing company will reduce the production of wafers in its 2 Japanese plants by 30% from the beginning of the new week.
This decision will have a similar effect on the volume of production.
Kioxia has not yet announced how long the reduction of working capacity in the company’s production facilities will continue.
In fact, this manufacturer has only announced that it will continue to review and adjust its production operations if needed.
Demand for SSDs
Contrary to the stagnation in the hard disk market, which is under a lot of pressure from internal factors in the storage industry; The decrease in demand for SSD memories is influenced by macro factors.
Inflation increases the cost of living and reduces consumers’ willingness to pay.
The market of expensive electronic equipment is obviously prone to vulnerability in such conditions; Especially since last year and during the quarantine, many users used the opportunity created to upgrade their laptops and personal computers.
Similarly, cloud service providers and businesses with in-house server infrastructure are also cutting costs.
For example, Microsoft recently announced its decision to increase the lifespan of Azure servers from 4 to 6 years. This decision is likely to save Microsoft about $4 billion in fiscal year 2023.
As Kioxia company has taken measures to prevent excess supply of its products to the market; Other market players have implemented similar measures.
Micron announced last week that the company is reducing the use of DRAM and NAND chips in select regions.
This phenomenon, in turn, will reduce the volume of production. Undoubtedly, other manufacturers will also follow this procedure.
However, sales volume is not the only concern of 3D NAND memory manufacturers and storage device vendors. After a period of price increases due to high demand and supply chain problems, the current economic conditions have had the opposite effect.
According to data published by the TrendForce research institute, the price of 3D NAND wafers within a period of 3 months has decreased by about 30% compared to the previous 3-month period.
Due to the continued low demand for devices and servers, it is expected that the trend of price reduction will continue. In such a situation, some products will even be sold at a loss; Until the market situation improves.