January 23, 2021
According to the Economic Daily News, the price of semiconductor chips is out of stock and the price rises are blowing on the storage-type flash memory (NAND Flash) control IC. Due to tight supply, some companies have suspended new orders. Phison recently increased the prices of related products by as much as 15% to 20%. Some items were even higher, marking the first price increase in the past eight years.
Phison’s increase in the quotation of NAND Flash control ICs this time mainly reflects that the housing economy has promoted the hot sales of terminal devices such as Chromebooks and TVs, which has driven the market's surge in demand for low- and medium-capacity embedded memory (eMMC) below 64GB, and foundry production capacity Factors such as insufficient supply of NAND control ICs due to crowding, and rising costs of foundry and packaging and testing.
Phison said that foundry production capacity is now very tight, and packaging and testing prices have been gradually increased. In addition, the New Taiwan dollar has appreciated by about 6% this year. Therefore, to reflect rising costs, it has adjusted product prices. According to analysis by industry insiders, under the condition of very tight foundry and exchange rate factors, it is expected that NAND control chips will rise by not only 15% to 20%, but even higher than this rate.
In spite of the weakening of NAND Flash quotations, Phison, driven by new products from major international manufacturers such as Super Micro, increased its net profit after tax by 55% in the third quarter, and net profit per share was 9.3 yuan (NTD, the same below), which is a single The second highest quarterly; the net profit per share in the first three quarters was 24.94 yuan, surpassing the 23.05 yuan for the whole year of last year. Previously, foreign investors had called that Phison would earn more than four equity capital this year. With the increase in product prices, it is expected to further boost operations.
Phison's revenue in the first November was 44.322 billion yuan, an annual increase of nearly 10%, the best in the same period in the past. Industry insiders are optimistic that with the increase in the quotation of NAND control chips, and the subsequent market conditions of NAND Flash are expected to gradually heat up, Phison will benefit from rising volume and prices, and operations are expected to climb to a new peak.
It is worth mentioning that, because the control chip needs to be matched with NAND Flash to form a solid state drive (SSD), in terms of the total output of the storage market, not only may it not drop too much due to the limited production capacity of the control chip, it may even produce "Quantity-based pricing".
The latest report from Market Research Agency TrendForce pointed out that due to the full capacity of TSMC and UMC's foundry, coupled with the shortage of IC substrates, the delivery time has been extended, and the downstream packaging and testing capacity is in short supply, Phison and other NAND control chip manufacturers cannot meet Customer demand for additional orders, relevant manufacturers have suspended their quotations for new orders, and recently entered the critical period of bargaining in the first quarter of next year. It is expected that it will still be a seller's market. Control chip manufacturers are planning to increase prices, and the adjustment is estimated to reach 15% to 20% .
TrendForce expects that the insufficient production capacity of control chips may affect the supply of low- and medium-capacity memory modules. Some modules with strong demand will not rule out price increases in the first quarter of next year.