Growing trade tensions between the US and China and concerns about the Chinese economy have shaken the confidence of key industry players. Soft iPhone sales and a slowdown in cryptocurrency mining activity continued to dampen investor concerns over slowing demand.
Credit Suisse's Nigam said investors should focus on supply with Micron, SK Hynix and Samsung, all pointing to a reduction in investment.
"According to the current (capital expenditures) statements of all three mainstream storage vendors, you are looking at underlying supply growth that will not exceed 15 percent," Nigam said. "Demand growth will likely be far ahead even in a fairly pessimistic scenario."
The discussion in this sector could therefore be resolved by "current inventory concerns and a sharp (average selling price)". Concerns over probable bottlenecks … before the year ends.