1HMay NAND Flash contract price continues to fall

A certain NAND Flash vendor has offered attractive prices to stimulate sales as it enters the last month of its financial quarter. Other vendors have no choice but to participate in the price war as buyers compare offers. As market demand remains weak, NAND Flash buyers are expected to maintain conservative inventory management strategies to avoid risk from price decreases. Therefore, NAND contract price is expected to remain on a downtrend as the off-peak season continues. UFD Market Still Faces Challenges in 2Q12 Off-Peak Season As a result of Chinese New Year sales that did not meet expectation, the decreased number of work days due to the holiday, and the off-peak season effect, the UFD market fell by 10% QoQ in 1Q. Although UFD brand makers adopted aggressive price strategies in 1Q, promotional sales were still not enough to overcome the sluggish global economy and the off-peak season effect, and demand stimulation was limited. In 1Q, 4GB products accounted for the majority of UFD shipments, but as 2ynm 64Gb TLC output increases in 2Q, more module makers will be attracted to the higher density, and 8GB will replace 4GB as the mainstream. As the off-peak season continues in 2Q, UFD shipment volume is expected to decrease slightly compared to the previous quarter. It is worth noting that the delayed release of Intel’s Ivy Bridge platform may impact USB 3.0 demand momentum in 2H12.