Recent updates of Armor Hero

According to Nikkei News, Kaixia has completely terminated its production reduction measures, and in June, its capacity utilization rate returned to 100% full capacity operation. The market supply has increased significantly, which may suppress the resurgence of pricing trends.

According to Jibang's warning, in the third quarter, in addition to continuous investment in server construction on the enterprise side, especially the expansion of adoption of solid-state drives by AI, and the continuation of order momentum, consumer electronics demand continued to be sluggish. Coupled with NAND chip factories becoming more proactive in increasing production in the second half of the year, it is expected that the oversupply ratio of NAND chips will increase to 2.3% in the third quarter, and the average price increase will converge to a quarterly increase of 5% to 10%, which is not as expected.

The NAND chip factory has significantly expanded production in the second half of the year, but retail market buying has not yet recovered. The current wafer prices have fallen, and the decline has widened, resulting in some wafer prices being more than 20% lower than the contract price. The future upward momentum of wafer contract prices is difficult to support.

According to research institutions, Armor is the world's second-largest NAND chip supplier, with a market share of about 15% to 20%, second only to Samsung. Previously, NAND chip prices plummeted, with Armor leading the way in reducing production by 30%. Subsequently, multiple NAND chip suppliers followed suit in reducing production, boosting market conditions and leading to a rebound in prices. Recently, NAND chip factories have made profits.

At the time of the rebound in NAND quotations, Armor Hero has announced plans to resume full capacity operations and intends to use its factory in Shikichi, Japan to mass produce the most advanced NAND chips within July, in order to explore the rapidly increasing demand for generative AI and data storage.

It is reported that Armor will begin mass production of 218 layers of NAND chip stack data storage components. Compared with current products, the storage capacity will increase by about 50% and the power required to write data will be reduced by about 30%.

Industry insiders have stated that after the recovery of the 100% utilization rate of Armor Xia's production capacity, peers such as Samsung and SK Hynix will also follow suit to increase production capacity utilization rate in order to consolidate market share, leading to a significant increase in market supply once again.

From the perspective of the full capacity production in June, there will be increased NAND chips coming into the market as soon as August and September, which will affect the traditional peak season operations of Taiwan, China NAND related businesses such as Qunlian, Weigang, Shiquan, etc. in the second half of the year.

Qunlian believes that from the current perspective, the demand for enterprise level solid state drives (SSDs) used by NAND chip manufacturers for servers is good, and the NAND chip market price has returned to its previous normal level, allowing NAND chip manufacturers to start making normal profits, which should be easy to rise but difficult to fall, and basically showing a positive cycle trend.

Weigang holds a more conservative view on the NAND chip market, mainly because the world's seven major NAND chip suppliers have suffered significant losses in the past year. At present, after the price rebound, chip factories will increase production capacity and expand sales to make up for the losses in 2023. This situation may lead to oversupply in the market again. Ten Quan said that with the demand for AI PC DRAM capacity ranging from 24GB-32GB and NAND chips requiring 1TB to take off, Ten Quan will see growth in shipments as demand clearly rebounds.