Ad
Ad
Ad
Ad
Ad
Ad
Electronics Production | March 31, 2011

ASP of mainstream NAND Flash increased 5-15% in March

According to DRAMeXchange, after the strike of the 9.0 earthquake in Japan Tohoku area on March 11th, at first, there was a rapid spot price increase in the NAND Flash market, in response to the uncertain concern of an upcoming short supply.

But because the impacts caused by the earthquake on NAND Flash supply chain were unknown at the time, some NAND Flash suppliers did not change the contract price in the first half of March. Then, the damage to the work in process (WIP) materials at Toshiba and SanDisk’s Yokkaichi plant came known. Supplies of some raw materials for IC manufacturings were also reported. NAND Flash suppliers started to raise the contract price of NAND Flash in the second half of March. Average selling price of mainstream NAND Flash increased 5-15% in March. On the other hand, due to certain suppliers’ strategies of lowering the price of the 2xnm TLC products in order to increase sales by memory card and UFD makers at the end of 1Q, some contract price of TLC decreased about 10% in the second half of March. In 2Q, uncertainty factors will continue to affect the demand and supply in NAND Flash market. In regard to supply: 1.) On account of the fact that the loss of WIPs at Toshiba and SanDisk’s Yokkaichi plants and that a possible shortage of silicon wafer supply in the second half of 2Q, DRAMeXchange estimates the bit output of Yokkaichi plants will decrease up to 10% in 2Q, which will likely cause up to 4% decrease in global NAND Flash bit output in 2Q. 2.) As for the supply of upstream silicon wafer in 2Q, the shutdown of Shin-Etsu Chemical’s Shirakawa plant will cause significant harm, because its capacity accounts for about 20% of global silicon wafer capacity. Due to equipment examination and electrical brownouts, there is still no definite date for its production to resume. As for SUMCO’s Yonezawa plant and MEMC’s Utsunomiya plant, although they are temporary shut down due to electrical brownouts, but their capacities are comparatively smaller, so the effects they cause to silicon wafer supply in 2Q are limited. According to the current inventory levels of NAND Flash suppliers and their internal allocation and diversified procurement strategy of silicon wafers, it is expected there will be no effects on NAND Flash productions before the end of May. 3.) If the short supply of silicon wafer remains unchanged in 2Q, manufacturers will rearrange the silicon wafer reallocation in respect to different products. However, manufacturers are still observing the future development of supply & demand in NAND Flash market in 2Q. 4.) Mitsubishi Gas Chemical and Hitachi Chemical, the main suppliers of BT resin used in semiconductor products, plan to resume part of their production lines in affected areas at the end of March. Therefore, DRAMeXchange expects the shortage effects on BT resin supply to be eased in the beginning of May. In regard to NAND Flash demand: 1.) In 2Q, the retail memory card and UFD market will still be affected by the slow season effect. 2.) After the Japan earthquake, some plants, located in the same afflicted area, that supply components to the NAND Flash end-products, like Tablet PC, Smartphone and PC, were shut down due to electricity brownouts, raw material shortage and equipment maintenance. According to downstream manufacturers’ inventory level and the slow sales of end-products in 2Q, it is expected that NAND Flash alone will not disrupt their production plans before mid-May. In addition, downstream manufacturers have started to search and test feasible alternatives in response to a possible component shortage in late 2Q. 3.) Due to the fact that the demand for end-products in Japanese market is expected to decrease after the earthquake and that the shipments of end-products will be compromised by other component shortages and the delayed launch of new products from some vendors , the sales of NAND Flash end-products will likely decrease in 2Q and 3Q. On the bright side, the transport facilities in affected areas have been gradually restored, and experts from several countries have been working on ways to resolve Fukushima Daiichi nuclear power plant crisis. It seems that some problems in affected areas are on their way to recovery shortly. In addition, Japan is planning to restart part of back-up thermo power plants and coming up with electricity supply plans for this summer peak-period, in hope of reducing the impact caused by electricity brownouts on domestic production in the mid-term. In general, DRAMeXchange expects the demand and supply in NAND Flash market will both decrease slightly in 2Q. Due to the fact that there has already been a considerable surge of NAND Flash contract price in March in response to the supply uncertainty the contract price is expected to remain steady in April with all the above-mentioned demand and supply factors considered. However, as the supply of electricity gradually comes back to normal in mid-2Q, NAND Flash contract price will likely dip down due to the slow season effect of 2Q.
Ad
Ad
Ad
Ad
Load more news
October 11 2019 3:09 pm V14.5.0-2