Electronics Production | May 18, 2011

1H’May mainstream NAND Flash contract price declined

Since most NAND Flash end-applications such as memory card, UFD & system products entered off season in May, most end-product customers became conservative toward procurement while inventory level is already high due to the earlier speculative buying right after the Japan earthquake in March.
Thus, 1H’May mainstream NAND Flash contract price reflects a roughly 2-10% decline.

The NAND Flash market will be influenced by the following factors:

- Off-season continues in June,

- Demand in system products such as tablet PC and smart phone in 2Q/11 are mainly from the few major players,

- The supply of raw materials used in producing NAND Flash was not affected by the Japan earthquake. The production plans of 2Q/11 remains unaffected while the 2xnm migration was further adapted in 2Q/11 and boosted the NAND Flash bit supply,

- NAND Flash makers might adopt aggressive pricing strategy to lower the inventory level in June while approaching the end of the quarter,

- NAND Flash contract price sharply went up after the Japan earthquake in March. Lowering the NAND Flash price, before the system product makers launch new models in late 3Q/11 will encourage a higher capacity of NAND Flash storage embedded.

- Global economy recovery faces some uncertain factors in 2011.

After considering all the factors, DRAMeXchange expects NAND Flash to be oversupplied in May. Second half of 2Q/11 NAND Flash contract price will change from the previously steady price and start to decline.
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