© tilltibet dreamstime.com Analysis | September 12, 2013
2H’August NAND Flash contract prices drops 5-10%
The 2H’August NAND Flash contract prices have slid by approximately 5-10% due to the weaker than expected OEM demand and the lowered replenishment momentum resulting from the NAND Flash customers’ increased inventory.
Looking at the supply side, even though Samsung’s Xi’An plant will not be ready to officially begin production until Q1 of next year, the NAND Flash productions of both SK Hynix and Micron will be expected to commence throughout 4Q13 (Toshiba, in the meantime, has already managed to recover its entire production capacity during 3Q13). At present, it is projected that the Q4 NAND Flash capacity will grow by approximately 10% and that the NAND Flash manufacturers will continue to restrict their supplies as a means to control price. Even now, various manufacturers in the industry are still pressured by the prospects of increased inventories. Looking over to the demand side, due in large part to the continuous struggles faced by the notebook market, TrendForce predicts that the 2013 NB shipments will decrease by an estimated 10% compared to the same period a year ago. With the sales performance of UItrabooks as well as internally built SSDs already noticeably affected, an increasing number of PC OEMs are beginning to see a notable increase in their inventories, and are making downward revisions to their shipments. Even with the new smartphone and tablet products expected to launch during September, the eMMC capacity growth is still expected to be limited (if not weakened). This is mostly due to the conservative buyer attitude and the rise of low-cost smartphones and tablets. Taking into account the aforementioned developments and the not as expected 2H13 demand, TrendForce believes it is highly likely that the September prices will continue to drop.