1HApr. mainstream NAND Flash contract price falls 4-8%

As future order visibility is low, NAND Flash buyers are conservative on placing orders, reducing inventory levels to guard against the risk from price decline – unless vendors provide attractive price discounts. This buyer expectation is pressuring vendors to reduce price. However, this round of price slashing has not only caused profit erosion for NAND Flash vendors, but the effectiveness of lowering price to stimulate buying has decreased. Thus, NAND Flash vendors are leaning towards maintaining stable prices. Therefore, due to the slow season effect and the change in NAND Flash vendors’ pricing strategy, TrendForce expects the future NAND Flash contract price trend to show a mild decline. Price and Demand Cause Mainstream Density Increase for UFDs and Bundle Memory Cards In 1Q12, the majority of 1Q12 UFD shipments were 4GB products, but as 2ynm 64Gb TLC production increases in the second quarter, the reduced prices will attract UFD module makers, and 8GB may surpass 4GB as the mainstream density in 2Q12. As for the bundle card market, 2GB and 4GB were the mainstream densities in 1Q12. However, in 2Q12, as NAND Flash manufacturers will introduce 2ynm-class cards with densities of 4GB or more, and since 2GB is no longer enough to meet increasing mobile phone requirements, TrendForce expects mainstream bundle card density to increase from 2GB to 4GB.