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© pengyou93 dreamstime.com Business | May 24, 2013

Off-peak quarter impedes 2H'Apr. NAND Flash contract prices

2H'Apr. NAND Flash contract prices have weakened due to the tepid demand in the off-peak season.
Other than the 32Gb MLC price, which saw 5-6% growth, the prices of all the other NAND Flash chips remained flat.

The second quarter is generally known to be associated with sluggish sales performances; because of the channel business clients' conservative attitudes toward the market, the restocking momentum from the May 1st holiday period—which many thought would help to improve sales—ended up being weaker than expected.

While the NAND Flash manufacturers' plans to restrict channel business supplies remain unchanged, following the decelerating UFD and memory card demands, many of the channel clients are finding it increasingly more difficult to transfer their manufacturing costs to the consumers. The short term increases spotted in various NAND Flash prices, moreover, have begun to make the channel customers less and less tolerant of further price growth.

Because of these factors, NAND Flash contract prices stayed flat throughout the second half of April. With regard to 32Gb MLC, given that the decrease in the product's supply is greater than the decrease in its demand, its overall price growth has begun to slow down even as the shortage situation persists within the market.

Trendforce believes that the momentum for smartphones, tablet PCs, and ultrabooks will begin to pick up during second half of June. Until then, the sluggish performances of many of the system products are expected to continue. As the traditional peak sales period for memory and UFD products usually begins in 2H13, demands during May and June are not expected to show any noticeable improvements.

Looking at the supply side, given that NAND Flash manufacturers are still shifting their priorities toward the 20nm-class products, MLC chips with densities of 64Gb or above will continue to see their production numbers increase; the production numbers of the lower density MLC and TLC chips, on the other hand, are expected to fall. With demand showing signs of waning throughout Q2, TrendForce believes that the price momentum for high-density MLC chips will continue to weaken. Low density MLC and TLC prices are expected to remain relatively stable due to the rapidly decreasing supplies.

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