© grzegorz kula dreamstime.com Electronics Production | July 03, 2013
2H'June NAND Flash contract prices rise 2-5%
The NAND Flash contract prices have been exhibiting minor signs of growth throughout 2H'June. The prices for the mainstream NAND Flash chips have grown by approximately 2-5% compared to the amount in 1H'June.
On the supply side, companies such as Samsung, SK Hynix, and Toshiba are making rapid transitions into eMMCs and SSDs as a means to handle the Q3 restocking demands for smartphones and tablets. Micron and Intel, meanwhile, are assigning a significant portion of their production to OEMs in order to meet the growing demands for enterprise level SSDs. With the Q3 capacity anticipated to show only a growth of 6.1% QoQ, the extent to which NAND Flash supplies will increase this year is expected to be limited. On the demand side, it is predicted that the Q3 smartphone and tablet shipments will increase by 10-15% QoQ, and that the growing shipments will help sustain the demand momentum for eMMC and SSD products—particularly those coming from OEMs. In spite of the weak UFD and memory card sales in April and May, the module manufacturers remain optimistic that the demand situation for the two products will gradually change for the better following June. For 3Q13, the total growth in the shipment for UFD products is forecast to be approximately 5%. Given the concerns over the tightened channel market supplies in 2H13, and given the positive sales outlook associated with the upcoming peak quarter (3Q13), more and more manufacturers are taking active steps to replenish their inventory in advance. These preparation efforts are the main reasons why NAND Flash contract prices have been able to remain on a minor uptrend throughout 2H'June. In the future, the popularity of enterprise level SSDs are expected to continue growing thanks to the increased demands for cloud computing services and major data centers. These demands will make up for the sliding popularity in the OEM and channel SSD markets, and could eventually help enhance the sales momentum of the manufacturers who are known to produce enterprise level NAND Flash chips. With various new smartphone and tablet products due for release in the peak sales periods following September, the pull-in momentum related to eMMC and SSD products should begin to emerge as early as July. At the moment, many signs are pointing towards a notably healthy third quarter, one in which NAND Flash end-market demand will increase, and where the market is expected to spur a series of robust developments. For these reasons, TrendForce believes that in Q3, the general uptrend associated with the mainstream NAND Flash contract prices will remain unchanged.