Components | June 06, 2011

Drop in ASP for mainstream NAND Flash during 2H'May

Despite of the sluggish market in retail memory card and UFD in 2H’May, most NAND Flash system OEM demand has also weaken, reports DRAMeXchange.
Resulted from the aggressive pricing strategy from some NAND Flash vendors as approaching the end of the quarter, 2H’May mainstream NAND Flash average contract price has shown an 8%-16% decrease.

Most end customers had replenished inventory in April given the concern of supply shortage from Japan Earthquake. However, the off season surfaced after 5/1 labor’s day in China. Toward the end of Q2, most customers showed little interest in purchasing. Moreover, NAND Flash vendors were barely affected by the Japan earthquake. With the 2xnm migration accelerated output in 2Q11, the over-supply status in May and June has worsen.

Some end customers are monitoring the 3Q11 order status followed right after the 2011 Computex and also monitoring new system product models scheduled to launch in 2H11. On the other hand, the off season low price could encourage system product customers to boost the NAND Flash storage in 2H11. We expect NAND Flash market to remain dull in Q2.

While inventory replenishment will be initiated in mid-July when end customers needed to build up inventory for sales season and launch of new products. Thus, June NAND Flash contract price will continue to drop due to the Fujiwhara effect of the off season and quarter-end phenomenon combining together.


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