News

Shortages of NAND Flash – customer update

10/02/2017

I would like to take a moment of your time to give you an update on the supply problems that currently exist within our market. The shortages are affecting everyone, this is not an isolated situation and it is impacting on all manufacturers, and all customers all over the world.

 

For those of you who are not up to date with the latest news, the flash memory market is experiencing unprecedented demand and this is compounded by a limitation of manufacturing output which is putting further stress on the availability of product. It is common for this market to be volatile, it rarely maintains stability for a long period of time such is the growing demand for the product and the continued investments by the manufacturers to maintain their manufacturing competitiveness. I have been involved in this industry for nearly 20 years and I have never seen it like this!

 

There has been a shortage since last summer, and despite very tough market conditions, Cardwave is still able to support the vast majority of our customers with minimal interruptions to their business. We are working very hard to ensure our business with you is not impacted too much, but I have to be transparent with you and forewarn you that this shortage is expected to continue for most of this year.

 

There are many contributing factors such as the growth of smartphones in China, the continued adoption of SSD’s in enterprise and the challenges of migrating towards 3D NAND technology. It is a complex situation, so if you would like to know more then please contact me, I will be very happy to explain this in detail.

 

Cardwave has taken extensive steps to minimise any disruption to our customers, but despite our best efforts, there simply isn’t enough product to meet all our customer demands. We are however working very closely with all our manufacturing partners and we speak with them very regularly. All of them are very supportive and our partnerships with them are very strong which is why we have been able to get access to stock that others have been denied. However, despite their best efforts to support us, some orders will be delayed or part-shipped. We are working very hard to maintain our supply chain but cannot offer any guarantees. The outlook for the rest of 2017 suggests the shortages will continue and prices may rise a little, at least into Q4. It is not our intention to raise any prices but we are in a difficult situation so we will look at this on a case by case basis.

 

Most of the leading manufacturers are communicating the same message and our advice is the same as theirs, i.e.

  • Forecasting is essential (at least 3-6 months)
    • We may struggle to fulfil any order that has not been forecasted
    • It doesn’t have to be precise, and this is non-binding, but any forecast will help us to help you
  • Increase your buffer stocks where possible and give us as much notice as possible about any planned or likely changes to your product lines, ideally a minimum of 4-6 months
  • Inform your customers of the situation and expect a possible delay with some of your orders

 

Please be assured that myself and my team are on top of this, we are restricted in what we can do, but we are doing everything that is possible to maintain our business with you.

 

If you would like to contact me or anyone in my team then please do so. We are 100% focused on our customers and we will help you plan ahead. We will also take any special actions that may be necessary to support your business.

 

I will be sending regular updates to customers on this situation so please keep an eye on your inbox, our social media platforms and the Cardwave website as we will be using these to communicate with you. I am hoping your business will not be impacted too much, but some disruption is inevitable.

 

Paul Norbury
Chief Executive

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