Chia and Server Demand Could Keep NAND Prices High for Months

TrendForce finally had some good news for enthusiasts today with its prediction that, with the notable exception of Chia and enterprise-ready SSDs, NAND flash contract prices should remain fairly stable heading into the third quarter of 2021.

The firm said that quarter-over-quarter price increases should be in the single digits for the eMMC, client SSD, and 2D NAND package (MLC) segments in 3Q21 despite increased demand for end products and COVID-related supply constraints.

Some of that modesty will result from buyers drawing a line in the sand. TrendForce said that eMMC pricing, for example, "already underwent a considerable price hike that bordered on what the purchasing side considered unacceptable in 2Q21."

But modest increases are still better—for buyers and consumers if not for NAND flash suppliers—than larger price hikes. That's where the enterprise SSD and 3D NAND flash wafer segments, which are expected to double-digit increases, come in.

TrendForce said the enterprise SSD estimate was informed by its observation that "the market release of server CPUs based on Intel’s new Ice Lake platform has led to an increase in the procurement capacity for enterprise SSDs."

It also said that "stock-up activities for enterprise SSDs rebounded in the data center segment in 2Q21 after nearly three quarters of inventory adjustments" and that "overall server procurement has also been growing" over the last few quarters.

So far as wafer pricing goes: Blame it on Chia farmers. (Kinda) TrendForce said "the mining of Chia has been pushing up the demand for high-performance and high-capacity SSDs (i.e., channel-market products) since the second half of April."

There is some hope, though, because the firm also said "the effect of the recent cryptocurrency craze has also been gradually waning." That's probably because it's become increasingly difficult for most Chia farmers to turn any kind of profit.

Unfortunately the other factors influencing 3D NAND flash wafer pricing—namely the supply constraints caused by the renewed spread of COVID-19 in southeast Asia and the ongoing chip shortage—will remain even after Chia's popularity wanes.