As COVID-19 rapidly spreads globally, countries and regions have implemented “lockdowns” or “stay-at-home” policies to control the pandemic, leading to a suppression of global consumer willingness. Therefore, some analysts believe that the price of NAND Flash will sharply decline in the second half of this year due to the impact of the “coronavirus”. In response, Phison has expressed a different viewpoint.
Phison believes that there are no pessimistic reasons regarding the future of NAND; the overall demand is mostly just deferred rather than disappeared.
Phison states that this pandemic can be analyzed in two phases: initially, the outbreak was first discovered in mainland China, where lockdowns and work stoppages were implemented to control the spread of the virus. Phison benefited from the shift in orders, increasing its market share; subsequently, as the pandemic worsened in Europe and the United States, lockdowns and work stoppages began there, while mainland China gradually resumed work, leading to a rebound in NAND storage application demand, compensating for the impact of lockdowns or work stoppages in Europe and the United States.
Additionally, on the demand side, Phison believes that the server market had already been gradually increasing since the fourth quarter of 2019. Under the influence of the pandemic, the demand for cloud services has accelerated, further boosting NAND storage demand. Furthermore, as countries and regions implement remote work and remote education to control the pandemic, the demand for laptops has surged, leading to shortages and subsequently increasing NAND storage demand.
Phison believes that during the stay-at-home period, the rise of online shopping, remote monitoring systems, and e-sports applications, known as the “stay-at-home economy,” has also increased NAND storage demand. Moreover, 5G technology is set to begin large-scale construction this year, which will drive the rise of related application industries, including edge computing and autonomous vehicles, all of which require a large amount of NAND storage products (e.g., SSDs, eMMCs, UFS, etc.).
Regarding the embedded application system market, Phison states that customers continue to place orders and have not been affected by the pandemic.
In summary, Phison believes that there is no need to be overly pessimistic about the future NAND Flash market; demand still exists, it is just deferred.
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