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Components | April 20, 2011

1H’Apr. mainstream NAND Flash contract price flattens

According to DRAMeXchange, 1HApril NAND Flash contract price partially remains at a stable level or mildly up 2%-5%.
Most NAND Flash vendors had raised the contract price 10%-15% to reflect the uncertainty toward the supply side constraints after the earthquake. They tend to sustain the price at the same level in 1HApril. However, for those who did not significantly raise the price in March slightly increased the price for term of 1HApril.

Since most vendors of IC-used raw materials and components of NAND Flash end-products located in the affected area claimed their recovery progress will initiate from April, yet the rolling brownouts for summer and tighter supply of some raw materials and key components will still somewhat impact on the NAND output supply and end-product shipment from 2H2Q to 1H3Q. Especially some system product companies adopted aggressive procurement strategies to secure the following shipment. Therefore, it will cannibalize the shipment from other system product companies.

Despite most NAND Flash vendors tend to remain the same bit supply growth target after the earthquake, some vendors will slightly expand the capacity at the consideration of raw material supply as well as the OEM order status of system products in 2Q11 & 3Q11.

The slow season effects will surface after the inventory replenishment for China 5/1 labor day sales and enhanced output from 2xnm new process technology from 3Q11. That is, we expect NAND Flash contract price will likely remain stable in April and price will gradually decline to reflect the slow season effect and tighter raw material supply as the earthquake catastrophe getting eased after mid-2Q11.

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