Surging NAND demand sends big five’s revenue skywards in Q2

The top five NAND vendors increased their combined revenue by 77 percent between the second and third quarter, reaching $68.87bn in Q2, driven by surging AI demand and higher average selling prices, according to TrendForce. Samsung retained the top spot with $23bn in revenue, though its market share slipped from 31.6% to 29.3%, while SK Hynix and Micron gained share, and the top five collectively held 87.6% of the market. Suppliers are prioritizing DRAM and HBM capex, limiting new NAND capacity, so ASPs are expected to continue supporting revenue growth in Q3.

FLASH Surging NAND demand sends big five’s revenue skywards in Q2 The top five NAND vendors increased their combined revenue by 77 percent between the second and third quarter as they leveraged spiralling AI demand to jack up average selling prices. The figures from TrendForce https://www.trendforce.com/ showed the top five suppliers turned over $68.87bn in the second quarter, revenues set to grow further in the third quarter. This was down to “steady” AI server demand, particularly for enterprise SSDs, TrendForce said, with an ongoing supply shortage keeping a grip across the market. That revenue jump was the result of the top manufacturers’ pricing power, with Samsung, SK Hynix, Miron, Kioxia, and SanDisk, able to “raise ASPs significantly through contract negotiations.” Notably, the big five have no meaningful plans to significantly boost manufacturing capacity overall any time soon. “Suppliers are generally prioritizing capital expenditure on DRAM and HBM, limiting new NAND Flash capacity,” the analysts said. “ASPs are therefore expected to continue supporting overall industry revenue growth in the third quarter. Samsung retained the top spot in the market, with revenues of $23bn, though its market share slipped slightly from 31.6 percent to 29.3 percent. Second place SK Hynix and third place Micron boosted their shares from 17.6 percent to 18.2 percent, and 13.9 percent to 15/1 percent respectively. This meant Micron moved up into third place. Kioxia slipped slightly from 13.9 percent share last quarter to 13.6 percent, while SanDisk’s slice of the pie dropped from13.9 percent to 11.4 percent. The top five took 87.6 percent of the market overall, a dip from their collective 90.9 percent share in the first quarter. But slight movements around the edges have not worried market watchers. A research note from BPN Paribas earlier this week, drawing on attending Flash Memory Summit said, “As workloads transition towards inference, no single memory technology can economically handle every AI workload. High-bandwidth Flash HBF shows promise, though a talk from Google, SK Hynix, and SanDisk indicate HBF is best used as a tiered memory pool for KV cache that is complimentary to HBM rather than a direct replacement of HBM on an xPU.” In a separate note, BNP Paribas said, “SanDisk has strategically invested in datacenter products, which now accounts for 25 percent of sales. Datacenter is expected to reach 1.2 ZB of NAND flash demand by 2030, which is the estimated size of the NAND market today.” SK Hynix’s figures includes the Solidigm business it acquired from Intel back in 2020. Last week saw speculation that SK Hynix might kick off a US IPO of the former Intel business to draw in additional capital, while retaining control of the business. Some market watchers warned the move could spark concerns about diluting shareholder value. A Solidigm spokesman told us “Solidigm is working with SK Hynix to explore options for our growth, but we don’t have anything specific to comment on at this time.” Meanwhile, Micron put some of its cash pile to work this week, with Micron Ventures announcing “a $250 million investment built to partner with the companies shaping the future of AI and spanning the full AI technology stack - model architecture, compute, enterprise applications and physical AI.”