Macronix Chairman Wu Minqiu: NOR Flash price decline will slow down

Jiwei.com reported that as the growth rate of terminals slowed down, it was also transmitted to the supply chain. In particular, the memory market continued to decline.

According to digitimes, memory manufacturer Macronix's net profit after tax in the first quarter of 2019 was NT$142 million, a quarterly decrease of 95%, hitting a new low in 11 quarters. In particular, Japanese customer Nintendo has become more conservative in placing orders, and the Chinese market has also had an impact on the sharp drop in demand. Prices have fallen sharply in recent quarters.

Macronix Chairman Wu Min-chiu said that it is still difficult to say when NOR Flash prices will bottom out. The price decline will slow down in the second quarter, but it is expected that the bottom will occur after the Sino-US trade war ends and the contract is signed. Although low-capacity NOR Falsh still has price declines, it is mainly affected by the fierce competition in the mainland market. Macronix will also try to avoid the red ocean price-cutting market.

Wu Minqiu pointed out that NAND Flash has low price competitiveness, and although NOR Flash is more expensive, its quality is relatively stable. Although the industry is currently trying to introduce relatively high-quality NAND into the ADAS automotive market, the long-term demand for NOR Flash will continue to exist.

Regarding the price trend of NOR Flash memory, the market predicts that after two consecutive quarters of price decline, the decline will gradually narrow from the second quarter. Compared with the double-digit decline in the first quarter, the second quarter is expected to be controlled within 10%. There is also a chance that it will further narrow to the low single digit in the third and fourth quarters, gradually getting rid of the oversupply dilemma in the first half of the year.

Overall, memory prices continued to fall in the first half of 2019, and end customers adopted a wait-and-see attitude. It is expected that in the second half of the year, thanks to the increase in server and smartphone memory specifications and the price reduction effect that stimulates demand, there will be a chance for an upward trend.