NAND FLASH, DRAM, FLASH, EEROM, SRAM, and other storage particles; Memory module, SSD, CF card, U disk, and other storage component modules; HDD storage components; External storage devices, NAS storage devices, etc. can all be collectively referred to as storage.
All kinds of storage media products have a strong or weak relationship:
- NAND FLASH DOWNSTREAM PRODUCTS ARE MAINLY SSD;
- The downstream products of DRAM are mainly memory modules;
- SSDs can replace HDDs in some scenarios, and HDDs can also replace SSDs in some methods.
- NAS, external storage devices are widely used HDD or SSD;
From the perspective of the supply chain, value chain, and industrial chain, there will be a price correlation between various media, but the price strength relationship.
The above considers the price impact and correlation of storage from a macro perspective, considering the length and degree of understanding, the following is mainly to analyze the price formation of storage particles and components and constantly improve the thinking on storage procurement strategies.
① Price of Nand Flash Particles
The price of NAND Flash particles is very transparent on a global scale. Every day, the futures price of semiconductor particles will be refreshed by all types of semiconductor spot and research media, and there will also be a platform to publish the spot trading price of particles.
- DRAM will distinguish the technology level of particles: DD3/DDR4/DDR5;
- Flash will distinguish the classes of particles: TLC/MLC/SLC;
- It will also distinguish the capacity of particles 8G/16G/32G/64G;
- At the same time, it also distinguishes the prices of different applications of GDDR/LPDDR;
From the point of view of the supply chain, the original Nand Flash particle FAB is dominated by the United States, Japan, and South Korea.
- DRAM three original factories: Samsung in the long-term more than 40%, Hylux in the 30% hovering, MG in the 20% hovering, the three original factories occupy 90%+ of the market, Taiwan and mainland production capacity in the long-term single digit, particle application products are also low-end and edge.
- FLASH five original factories: Samsung accounted for 30-35% hovering, Hynix, and Solidam merged more than 20%; The proportion of western data is also about 20%, the proportion of magnesium is 10%-15%, and the proportion of domestic products can be basically ignored.
⑴ There are two main price categories
- Contract Price: key customers, the price in accordance with the agreement, regular negotiation, not affected by price fluctuations during the period, accounting for about 90%;
- Spot Price: reflecting the current market supply and demand situation, price fluctuation is more drastic than the contract price, accounting for about 10%;
⑵ Factors affecting the price of Nand Flash
- Downstream demand fluctuates, such as the demand for SSD and memory, and the main demand for SSD and memory comes from data centers/computers, communication, automotive, and consumer electronics (mobile phones, PC). When consumer electronics – mobile phones, PCS; Data center products – servers, external storage, switches, etc., are weak, which will seriously affect the upstream particle price factor. Similarly, when demand is high, the price of pellets will rise.
- Capacity and capital expenditure: large storage factories will have an annual capital expenditure plan and capacity plan every year, and there is a certain time period. When the demand is in excess, the original factory will need a certain time period to reduce production and reduce expenditure. Within the period, the price of particles will be affected by excess and shortage.
- Price manipulation and monopoly: Samsung, Hynix, and other Korean manufacturers will use their capacity advantages to monopolize and manipulate prices based on their dominant position in the market, which has been punished by the United States and the European Union. Chinese manufacturers are currently downstream of the industrial chain and are basically easy to become the sacrificing party of price manipulation.
② Price of Nand Flash Modules
Module products: The concentration of memory /SSD is far less than that of particles, and there are many manufacturers and players involved.
Especially in the consumer memory module, there are a lot of players in Taiwan and China;
In the enterprise level storage players, or concentrated on the original particle factory affiliated manufacturers.
⑴ The factors affecting the supply of modular products are much more complex
- Macro supply-demand relationship: when enterprise customers such as Internet and cloud computing customers Ali, Tencent, Huawei Cloud, Google, Amazon, Microsoft, META, etc., cut hardware procurement expenses, resulting in a sharp decline in demand, it will affect the price of memory and SSD; SSD and LPDDR prices will also fall at a time when demand for mobile phones and PCS is clearly weakening.
- Micro supply and demand relationship: the variety and number of suppliers of module products far exceed that of particle manufacturers.
⑵ The variety of module supply players is complex
- Not only the original particle factory, such as Samsung, Hynix, WD, Kioxia, and so on;
- There are also downstream China mainland and Taiwanese manufacturers, such as Kingston, Transcend, and Memory; SSD manufacturers are more, such as Longsys, Dapuwei, Derui, Guokewei, Yiheng Chuangyuan, DiskMFR, etc.;
- At the same time, there are agents in various regions in addition to manufacturers, and there will be Chinese mainland in the Chinese market, and Southeast Asia Shenzhou North America agents supply goods;
- Spot merchants: It is a relatively strong financial trader who uses relationships with global agents and OEMs to purchase goods for transactions.
- Speculators: It is a manufacturer with average financial strength but relatively smooth information, using agency resources, OEM resources, and the relationship between the original factory, and the manufacturer who looks for goods after receiving orders.
- OEM: Huawei, Alibaba, Inspur, Super Giant Change, Foxconn, etc. will sell the goods through affiliated traders and related manufacturers because of the surplus of the number of contract purchases.
Because of supply diversification, the change in the supply and demand relationship will be inconsistent with macro supply and demand at a specific time and scenario, resulting in changes in spot market prices that will be difficult to form a fixed regularity.
When the general trend of a material supply surplus, when the diversified supply side appears, you can achieve good price game benefits through inquiry and comparison, whether it is emergency procurement or conventional procurement, there will be greater benefits.
When supply exceeds demand, the buyer requires more stable supply sources to stabilize the overall supply cost; at this stage, agents and agents closely related to spot dealers can provide a stable supply source.
Sales personnel who play cards in the spot market will form a fixed information transmission mechanism for the market and price and will have their own information and resource circles, but everyone and each supplier will only get the corresponding information mechanism and resource mechanism for the familiar range, and because of the difference in background, origin, and personality, there will be different judgment results.
If the procurement demand is too concentrated in the short term, the supply information and feedback mechanism are more from the spot market, the space and room for adjustment are too small, and it can only be empirically from the traditional supplier to inquire about the price to obtain price dividends. If you want to break the price imbalance caused by urgent demand, the most important thing is to form a certain baseline of mainstream material demand in demand planning and market planning and form a balance of supply through agents and agents with strongly related manufacturers.
And if the purchaser is an OEM manufacturer and ODM manufacturer, the model construction of the reserve plan and safety stock plan, and the market forecast is a very key factors, from the relevant tutorials of European and American supply chain feedback information, Chinese domestic enterprises in the supply chain management level, especially demand forecast management and supply risk hedging is at a relatively low level, although Huawei Lenovo and others have made certain breakthroughs in management practice for many years, and most enterprises, under China’s existing industrial ecology, are prone to a lack of contract spirit environment. As a result, the difficulty of managing the supply chain has been artificially increased. Market demand and SOP are ultimately conducive to procurement risks, but it is also difficult to achieve the effect of one drug to solve all diseases.
There are many storage sales veterans in the market, and there are also many spot speculation masters, we have reason to believe that they are familiar with the market environment, customers, suppliers, and friends circle can form inherent capabilities and strengths, and these are not absolutely trusted and relied on for the buyer, procurement must form their own inherent judgment and procurement awareness for more diversified and more comprehensive supply sources, in order to better make purchasing decisions and behaviors.