2H’July mainstream MLC NAND Flash contract price declines around 4pc

TAIPEI, TAIWAN: 2H’July mainstream MLC NAND Flash contract price slightly declined around 4 percent since customer base and demand varied during the period and resulted in the mild downward pricing trend, says DRAMeXchange.Source: DRAMeXchange

July is traditionally regarded as the slow season for memory card and UFD. Since demand for inventory replenishment seems to be weak and cost competitiveness proved due to technology migration, vendors tend to stimulate the purchase willingness with favorable price.

However, some vendors receive the order request for peak season from system customers in 3Q09 that they prefer to remain the stable price so that they can keep certain of profit on hand. That is, contract price for 2H’July remains the flat, according to DRAMeXchange.

Despite slow season pattern for NAND Flash main application product will continue till mid-August and NAND Flash vendors receive orders from electronic system customers.

The mix effect will indicate the mild pricing fluctuation that different product mix, variable supply status and business development will resulted in different pricing strategy.

DRAMeXchange believes that the mix of ups and downs will continue till mid-August that short-term NAND Flash contract price will demonstrate a less volatile pricing trend.Source: DRAMeXchange

1HJuly mainstream MLC NAND Flash contract price slightly drops 1-5pc

TAIPEI, TAIWAN: End-customer’s purchase willingness in early July is cautious since July is traditionally regarded as the slow season for NAND Flash main products such as memory card and UFD.

Inventory level for some card makers is still above one month. NAND Flash vendors slightly lower mainstream MLC NAND Flash contract price to enhance the purchase volume. Therefore, 1HJuly contract price of mainstream MLC NAND Flash slightly decreased 1-5 percent, says DRAMeXchange.

The 16Gb MLC average contract price has dropped 7 percent to $4 in 1HJuly from $4.3 in May, while 32Gb MLC average contract price has decreased 12 percent to $6.64 in 1HJuly from $7.56 during the same period.

The 32Gb MLC contract price showed the bigger downward pricing trend since most vendors already migrated to more advanced process technologies to produce high-density products. Therefore, price cut in promotion for 32Gb MLC was larger than 16Gb MLC over the past two months, according to DRAMeXchange.

Benefited from hot sales of iPhone 3GS and the new smartphone models launched, NAND Flash suppliers eagerly seek to increase the shipment portion of electronic system maker customers in their product mix to ease the slow season effects by memory card and UFD to improve profitability and stabilize market price.

On the other hand, end-customers urge suppliers to further offer some price discount to help them stimulate the market demand in light of the slow season effect, higher inventory level at hand and cost-down efforts of suppliers’ process technology upgrade.

Buyers and suppliers have different opinions toward the short-term market view and pricing trend and inventory replenishment for year-end hot reason is expected to warm up in August.

The NAND market may continue to show the tug-of-war status in July due to dissimilar positive & negative market factors perceived and expected by both sides. Therefore, the NAND Flash contract price is likely to somewhat soften or stay flat in the short term.Source: DRAMeXchange

NAND Flash price hike undermines notebook SSD market

EL SEGUNDO, USA: Surging prices for NAND-type flash memory has diminished the previously-promising market for Solid-State Drive (SSD) storage technology in notebook PCs in 2009, according to iSuppli Corp.

“The recent increase in NAND flash pricing has benefitted memory chip makers, but also has served as a major damper on the market for SSDs used in notebooks,” said Michael Yang, senior analyst for mobile and emerging memories at iSuppli. “About 90 percent of an SSD’s value consists of NAND flash memory, so with the pricing for such chips rising, consumer and corporate adoption of solid-state storage has been slowed.”

Average pricing for 16Gbit density Multi-Level Cell (MLC) NAND flash rose to $4.10 in the second quarter of 2009, a dramatic 127.8 percent increase from $1.80 in the fourth quarter of 2008. The attached figure presents iSuppli’s estimate of average pricing for this common density of NAND flash.

iSuppli: 16Gbit Density Multilevel Cell NAND Flash Price Forecast (Pricing in US Dollars)Source: iSuppli, July 2009

In order to return to profitability, NAND flash suppliers in 2008 cut capacity to reflect weak market demand. This caused pricing to rise, despite continued poor sales.

SSDs can serve as replacements for Hard Disk Drives (HDDs) in personal computers, storing data by using flash memory rather than traditional rotating media. Prospects for SSDs had been boosted by the rising demand for notebook PCs, whose low storage requirements and long battery lives made them a good fit for solid-state storage.

“However, with the rise in NAND pricing, even a 32Gbyte MLC SSD represents a major addition to the final price of a notebook PC,” Yang said.

Mainstream MLC NAND Flash average contract price flat in 2H June

TAIPEI, TAIWAN: Mainstream MLC NAND Flash average contract price stayed flat or slightly declined in 2H June due to the interaction of quarter-end, slow reason and new smart phone launch effects. Therefore, recent NAND Flash market showed consolidating status, says DRAMeXchange.Source: DRAMeXchange

Upstream & downstream NAND Flash related makers intend to lower their inventory level by the end of June. Moreover, June and July remain the traditionally slow season for NAND Flash’s major applications such as memory card and UFD.

Meanwhile, NAND Flash cost has largely increased in 1H09. Both leads to the purchase hesitation for memory card and UFD makers in June. Memory card makers urge NAND Flash suppliers to offer some price discount in order to stimulate the demand in slow season.

Thus, some NAND Flash suppliers slightly cut price to help increase clients’ procurement volume. Therefore, contract price for some products slightly declined in 2H June.

With the exciting sales figures of new iPhone 3GS and other new smartphone launch to the market, some NAND Flash suppliers will benefit from these system maker customers’ restock demand in 3Q09.

Some NAND Flash suppliers thus can maintain the stable pricing policy and help improve the profitability. DRAMeXchange is confident that contract price for certain products stayed flat in 2H June.

Given the fact that more new smartphone will launch in 3Q09, 3G cellular phone upgrade demand in China market and U.S. economy expected to gradually recover in 4Q09 will help revive the year-end holiday sales, demand for NAND Flash related products is expected to gradually improve quarter by quarter in 2H09.

However, in light of the NAND Flash demand is expected to further improve in 2H09, DRAMeXchange expects that some NAND Flash suppliers to slightly increase their output in 2H09 according the latest market consumption status.

Considering that, DRAMeXchange believes that NAND Flash market to stay at the more balanced supply/demand status in 3Q09. As the slow season effect and the new product launch effect both will affect the NAND Flash market after the 2Q quarter-end period, DRAMeXchange predicts that NAND Flash contract price to stay flat or slightly soften in July under the tug-of-war effect of positive & negative factors.