Phison Electronics Corp (群聯電子), a supplier of NAND flash memory controllers and modules, expects the memorychip industry to face its worst supply crisis next quarter, as rising demand — primarily from smartphones and servers — outpaces supply gains.
Despite NAND supply tightness, Phison expects its revenue and profit to reach record-high levels this year, as it can secure a relatively stable supply from Toshiba Corp on the back of their long-term partnership, the company said.
The Japanese firm holds a 10 percent stake in Phison.
“Some have said NAND prices might start to trend down moderately in the third quarter as supply and demand will reach parity, but we do not see that happening,” Phison chairman Pua Khein-seng (潘健成) said on Thursday night. “We are seeing a price rebound in the middle or end of next month, compared with a 20 percent to 25 percent slump in April and last month.”
Advisory firm Gartner Inc last month said that NAND prices could peak this quarter after a long stretch of price increases since the second half of last year.
The tight supply might last for a while, Pua said, citing messages from most of Phison’s suppliers.
In addition, the limited output of 3D NAND by the world’s major suppliers will not quench the market’s voracious appetite for NAND chips, with most 3D NAND supplies already purchased by smartphone vendors ahead of new product launches in the second half of the year, he said.
“The supply crunch in the third quarter will be even more severe than the third quarter of last year. It could be the worst of all time,” Pua said. “I am not worried about market demand over the next two years.”
Pua’s confidence builds on his expectation of rising demand for greater memory capacity for smartphones and new demand from drones, autonomous vehicles and other consumer electronics.
Pua’s forecast followed that of a peer on Wednesday.
“Supply of NAND will continue to be tight in the third quarter. We still cannot get enough NAND to produce solid-state drives,” Adata Technology Co (威剛科技) chairman Simon Chen (陳立白) said.
Phison reported revenue of NT$9.56 billion (US$316.45 million) and profit of NT$1.28 billion for last quarter, and it forecast better results this quarter.
The company is considering an investment in Toshiba’s semiconductor business for future growth potential, Pua said.
“Without the ammunition [NAND supply], it is difficult for the company to grow further,” he said.
The firm aims to expand its revenue past NT$100 billion over the next few years, Pua said.
Phison reported NT$43.78 billion in revenue for last year and NT$37.18 billion in 2015.
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