4Q10 NAND Flash contract price will indicate mild decline given mixed seasonality and new product launch effects

TAIWAN: According to DRAMeXchange, The 1H’Oct. NAND Flash “average” contract price show the 3-5 percent partially decline and partially stable. Even though we have seen better-than-expectation China holidays sales, yet the memory card and UFD makers continue working hard on lowering inventory level and wait for inventory re-stock movement for year-end sales in late October.

The market is quite silent given the conservative attitude and some NAND Flash contract price indicated the mild decline pattern in 1H’Oct. NAND Flash vendors are expecting the stable of orders of inventory replenishment for year-end sales from system product customers will last to 1H’November while some other vendors already significantly cut the price for promotion in September and result in the comparably pricing trend in 1H’Oct.Source: DRAMeXchange.

After the inventory re-stocking peak in 1H’Nov, NAND Flash demand will turn slow and we expect it won’t warm up until the demand for Chinese lunar New Year in 1H’Jan. Although most NAND Flash vendors will continue to increase the output portion of 2xnm & 3xnm and TLC in 4Q10, yet some vendors are considering slightly slow down the pace on capacity expansion to ease the potential impact from slow season.

Meanwhile, some system product customers will launch new smart phones and tablet PCs with higher storage capacity from 4Q10 through 1Q11, which we believe it will partially help ease the slow season effect and floppy demand for memory card & UFD in retail market as well.

That is, DRAMeXchange expects 4Q10 NAND Flash contract price to indicate the mild decline and pricing strategies will be varied from different suppliers with different customer mix and order conditions.Source: DRAMeXchange.