Toshiba's shutdown may cause NAND price fluctuations

Five factories of Toshiba Semiconductor (TMC), the world's second largest NAND Flash storage manufacturer, recently suffered power outages due to an earthquake, resulting in operational interruptions. Although Toshiba has not yet announced the extent of the damage, Japanese foreign capital and the industry have determined that the damage has been severe. It is expected that the original wait-and-see attitude of the market will be reversed, resulting in stocking demand, prompting NAND Flash prices, which have been falling for more than eight consecutive quarters, to stop falling, and an opportunity for a rebound in the second half of the year.

There are no manufacturers in Taiwan that produce NAND chips, but memory-related manufacturers including Phison, ADATA, Transcend, Apacer, and Team Group all have NAND-related application businesses. As the NAND market is expected to turn around, related Taiwanese manufacturers will also benefit, especially Phison, which had previously announced that it would take advantage of the previous wave of low NAND prices to stock up heavily.

Japanese foreign investors believe that Toshiba Semiconductor's five factories, NY2, Y3, Y4, Y5 and Y6, in Yokkaichi, Mie Prefecture, Japan, were shut down last week due to a strong earthquake. Toshiba Semiconductor's global NAND Flash market share in the second quarter of this year was about 32%, ranking second in the world, second only to Samsung. The production of its five factories was affected, affecting the overall market supply situation.

Japanese brokerages estimate that the strong earthquake in Japan last week affected the production of five Toshiba Semiconductor factories in Yokkaichi, Mie Prefecture, and the related effects cannot be underestimated. Assuming that 50% of the chips were damaged due to the power outage, and another 15% to 20% of the wafers had to be remade, the global NAND chip supply will be affected by 2% to 3%. If the resumption of normal production is delayed, the impact may be greater.