February is winding down. The Asian Lunar New Year is finally behind us and the Year of the Dragon is underway. Factories and distribution centers are open and shipping product again.

Every year we see an increase in pricing during the Chinese New Year period as stocks become tighter, and if demand stays up so will pricing. If demand slacks then pricing will fall. This is a seasonality we have been riding together for a very long time.

This year we have a new cycle underway which will cause some big changes. SanDisk/Kioxia have suddenly stopped mass production for NAND wafers below 64GB capacity. This means memory cards, USB drives and SSDs with a capacity lower than 64GB will use a 64GB wafer so there will no longer be a price benefit to the smaller capacities.

Here is what we are seeing this week:

  • Prices on 32GB and 64GB products are beginning to increase and this trend is expected to continue.
  • Stocks for 16GB are shrinking and headed into shortage.
  • For the few remaining 8GB models still active availability is okay for the moment but expected to also head into shortage as post-CNY demand kicks off.

We don’t have a crystal ball, but we’ve been in this market over 26 years now and can make some educated guesses about what is coming:

  • 8GB and 16GB products will start going EOL (End Of Life) for many series.
  • When products with capacities from 8GB to 32GB are still available prices may be similar or even higher than 64GB equivalents.
  • Availability for lower capacity products could become increasingly difficult.

We’re here to help you navigate these complexities.  I recommend a three-tiered approach to these changes:

  1. Take a look at your current inventory and demand stream and possibly top off your supply to stay ahead of potential shortages and pricing spikes.
  2. Begin testing the higher capacity equivalent in your application so it is approved for use when it becomes the smarter choice to source.
  3. Consider testing and approving an alternate brand or two to maximize your options in a rapidly changing market.

On all counts, good preparation will ensure you continue to have the solutions you need with minimal impact to your operations. Please contact me when you have a moment so we can take a look at your current items and do some planning.

I look forward to answering any questions you have about this. Until then, take care.

– Shaun

Photo by Declan Sun on Unsplash