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Components | October 17, 2011

1HOct. NAND Flash ACP remains stable

Since demand did not warm for this year’s 2H peak season inventory replenishment until September, the renewed demand from both new smartphone and ultrabook models and preparation for the holiday season is likely to continue until early November.
Thus, NAND flash average contract price for 1HOct. saw both slight increases and decreases, but should stay stable overall for the month of October due to continued support from year-end restocking demand. However, as demand from certain system clients’ OEM orders was better than that from the memory card and UFD retail channel market, TLC average contract price was correspondingly weaker than MLC average contract price in 1HOct.

Furthermore, the 2xnm-node process will become NAND flash suppliers’ mainstream process technology beginning in 4Q11, and a portion of suppliers will be introducing new 2ynm-node products starting in November. As suppliers will be focusing on manufacturing 64Gb MLC products for both 2xnm and 2ynm output instead of 32Gb MLC products, 64Gb and 128Gb MLC average contract price decreased slightly due to the supply increase while 32Gb and 16Gb MLC average contract price increased slightly due to the output decrease.

However, owing to the lower cost per bit of high-density chips, the changes in process and product mix will help enhance downstream clients’ willingness to adopt higher storage capacity applications in 4Q11. In the short term, as market supply volume gradually increases in 4Q11, the NAND flash market will enter a state of oversupply after the inventory replenishment peak in early November. Thus, NAND flash contract price is expected to shift from relatively stable to somewhat weak before actual sales figures from the year-end holiday season are available.

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