© solstudio Components | January 18, 2013

1HJan NAND Flash contract prices stay flat

According to DRAMeXchange, although NAND Flash demand has already reached its peak during 4Q12, demand momentum for January is expected to persist given the currently low inventory levels of module manufacturers and the expanded replenishment efforts intended for Chinese New Year.
With NAND Flash manufacturers increasing the proportion of system products and exercising their usual control on production, 1HJan contract prices are, for the most part, expected to flatten out. We predict that the prices will remain flat as the coming Chinese New Year arrives.

Looking towards the post-New Year NAND Flash market, an oversupply situation is expected to occur as demand momentum gradually phases out in the off-peak season. On the supply side, as NAND Flash vendors continue to view 1H13 with reservations, the wafer amount in 1Q13 will likely remain at about the same level as it was during 4Q12.

With the supply restrictions continuing as usual, and with efforts to improve the yield rate and cost-effectiveness of the 20nm manufacturing process slowing, the proportion of 20nm products, on the whole, have been below expectations, with overall production increasing by only 5% QoQ.

Responding to the growth of low-priced mobile products, NAND Flash manufacturers have begun to increase the proportion of system products while squeezing out products from other categories.

On the demand side, 1Q13 shipments for smartphones, tablets, and notebooks are on average 10-15% less than that during the previous quarter. The retail market performances of memory card and UFD products, likewise, are also expected to show signs of weakening. As suggested by the supply chain data, most new mobile products are set to be launched during the second quarter of this year, whereas new Ultrabook models are not expected to show any noticeable momentum until 3Q13.

In the event that retail momentum does not provide any obvious stimulation, NAND Flash demand will likely end up in a somewhat sluggish state. We believe that the NAND Flash market will experience an oversupply following Chinese New Year, and that towards the end of 2Q13, prices will go on a gradual decline.
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December 13 2018 1:08 pm V11.10.14-1