2H April NAND Flash contract price steady

This is mainly due to the module clients’ conservative attitude towards the future market sales performances and the UFD and Memory cards’ continuous price decline. To prevent profit margins tightening, NAND Flash suppliers began avoiding aggressive price strategies, and became increasingly less willing to give in to their clients’ pricing demands. With market transactions becoming sluggish, as a result, NAND Flash contract prices ended up staying flat throughout the second half of April. Affected by industry oversupply during 1H 2014, NAND Flash price drops became increasingly noticeable within the market. The profits generated from various NAND Flash products, as revealed by the first quarter financial reports, have diminished considerably compared to the previous periods, and have made the industry’s four main NAND Flash manufacturers less willing to lower their prices during 2Q14. The transactions within the entire NAND Flash industry became relatively sluggish as a direct result of: 1)the gradually closing of the gap between market prices and manufacturing costs, 2) the unimpressive shipment momentum for memory cards and OEM products, and 3) the limited benefits gained from resorting to aggressive price strategies. Neither the industry's buyers nor sellers appear to be in agreement over what the future prices should be in the short term. On the demand side, DRAMeXchange predicts that the 2H 2014 smartphone shipment growth will reach close to 20% compared to 1H 2014, following the release of new flagship devices such as the iPhone 6 and China’s 4G/LTE smartphones. Regarding the tablet industry, other than Apple's new iPad, a series of mid-to-low range tablets are anticipated to enter the market during the back-to-school period and China’s National Day Holiday in 3Q14. In the second half of the year, tablet shipments will have a chance to grow by as much as 40% from 1H 2014 as the economy stabilizes and manufacturers begin to seize opportunities during the peak quarter. The new mobile device releases are set to boost eMMC and eMCP NAND Flash product demand starting from the end of 2Q14 and help ease the oversupply situation within the industry.