2HAug NAND Flash contract price affected by mixed market factors

TAIPEI, TAIWAN: The 2HAugust NAND Flash contract price remains flat for high density products, while mild rise for low density products since output portion based on 4Xnm & 3Xnm advanced process technologies increases and reducing output portion for low density products based on mature process technologies, says DRAMeXchange.

Meanwhile, NAND Flash suppliers’ low-capacity memory card shipment to the handset customers has a higher priority. Therefore, low density NAND Flash contract price for 2HAugust shows a mild rise pattern.

Despite the increasing output portion from advanced technology for high density MLC NAND Flash and weaker procurement demand for memory card and UFD customers in August, 2HAugust high density NAND Flash contract price still remains flat since hot season restock orders used in high-capacity handset and MP3 products will keep warming up in 3Q09, according to DRAMeXchange.

Fig. 1: 32Gb MLC NAND Flash contract price trendSource: DRAMeXchange, August 2009

Given the expected recovering restock demand from electronics system and memory card customers starting from September for China Holidays in early October and year-end hot season in US & Europe, the 3Q quarter-end effect and increasing output portion of 3xnm process technologies from most NAND Flash suppliers after August will partially offset the positive market factors.

DRAMeXchange states that the NAND Flash contract price may continue to partly demonstrate mild rise and partly stay stable in the short term under the interaction effect of positive and negative market factors.

Fig. 2: 16Gb MLC NAND Flash contract price trendSource: DRAMeXchange, August 2009

NAND Flash contract price appears up and down with mixed market factors

TAIPEI, TAIWAN: The mainstream MLC NAND Flash contract price appears to go up and down with mixed factors that some suppliers slightly adjusted down 2-5 percent on some high-density MLC NAND Flash contract price to spur the demand since output portion of high-density products produced by more advanced process technologies (4xnm and 3xnm) is raised along with cost advantage.

In the meantime, output portion of low-density products produced by more mature process technologies declines and some suppliers mildly adjusted up 5~7 percent NAND Flash contract price on some low-density MLC chips, says DRAMeXchange.

Fig. 1 16Gb MLC NAND Flash Contract Price TrendSource: DRAMeXchange, Aug. 2009.

Despite of long-term restock orders from cellular and MP3 system customers in 3Q09, DRAMeXchange believes that memory card and UFD customers are still in the status of slow season in early August. However, the inventory replenishment for memory card and UFD products is expected to gradually recover staring from late August.

Some suppliers will slightly increase the wafer output in 3Q09 and most suppliers will gradually raise the output portion of 3xnm process technology after August. It will result in the pressure of upward pricing trend for high-density chips.

Combined with the above positive and negative market factors and quarter-end effect in coming September, DRAMeXchange expects NAND Flash market to roughly stay at a more balanced status in 3Q09.

Fig. 2 64Gb MLC NAND Flash Contract Price TrendSource: DRAMeXchange, Aug. 2009.

Nevertheless, NAND Flash suppliers will apply different pricing strategies depending on individual client base, order mix and process technology breakdown. Therefore, NAND Flash contract price may continue to demonstrate the mild ups and downs pattern or roughly stay stable in the short term.

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 remains flat due to quarter-end effect, slow season

TAIPEI, TAIWAN: NAND Flash market has remained stable since the beginning of June. As for demand side, the market has not fully recovered and end-product sales are perceived weak, says DRAMeXChange.

The launch of new generation iPhone is expected to have some positive impacts on the market and other cell phone vendors also introduced series of high-end smartphone at the same time. That is, the demand from cell phone system customers has been highlighted.

However, demand from other main application such as memory card and UFD still remain weak due to the floppy end-user demand and quarter-end effect along with the inventory adjustment. Therefore, the downstream clients are more conservative toward the purchase and would rather postpone the spending.

NAND Flash price has reached the chip cost level and vendors look forward to seeing their favorable price in the future so that they can show the profitability figures.

On the other hand, customers are reluctant to see the weaker demand trigger by increasing cost and unaffordable product price especially for the future star product -- SSDs. We believe the short-term NAND Flash contract price will remain flat under the dynamic environment such as quarter-end effect, traditional slow season and new products launch, according to DRAMeXchange.

Revenue ranking of NAND Flash branded firms in 1Q09

TAIPEI, TAIWAN: The 1Q09 total revenue of WW NAND Flash Branding companies was $2.086 billion, which dropped 2.4 percent from $2.137 billion in 4Q08.

Although the industry was still under the continuing impact of global recession and weakening demand, the price remained stable because certain NAND Flash makers adjusted their supply strategies. The overall average selling price increased 18 percent QoQ and the total shipment dropped 17 percent QoQ in 1Q09, says DRAMeXchange.

Fig. 1. 1Q09 Revenue Ranking of NAND Flash branded companies*1. 1Q09 foreign exchange average value: USD against JPY: 93.6 per dollar, USD against Korean Won: 1414 per dollar.
*2. 4Q08 foreign exchange average value: USD against JPY: 96 per dollar, USD against Korean Won: 1363 per dollar.
Source: DRAMeXchange, May 2009.

1Q09 NAND Flash branding company revenue rankings
Samsung’s revenue was $750 million, accounting for 36 percent of the market revenue and retained its number one position. Toshiba’s revenue was $740 million, which accounted for 35.5 percent of the market revenue as number two.

Micron surpassed Hynix with the 1Q09 revenue of $200 million, and accounted for 9.6 percent of the market revenue as number three. Hynix this time dropped to number four position with a revenue of $171 million. Intel's revenue was $155 million in the number five position. Numonyx was at number six position with a revenue of $70 million.

As far as Samsung is concerned, although the 1Q09 ASP went up, the shipment decreased. Under the influence of slow season, output reduction, and delaying new process, the supply bit growth declined. The demand of NAND Flash major applications, such as mobile phone and other consumer electronics products all had weakened in 1Q09.

Even with increasing ASP, the revenue of Samsung remained stable. Samsung's 1Q09 sales revenue was $750 million and its market share increased from 34.9 percent in 4Q08 to 36 percent in 1Q09. Samsung retained its number one position of the industry, according to DRAMeXchange.

Toshiba's NAND Flash ASP increased, but the supply decreased due to production cut. Its 1Q09 revenue remained stable and was at the $740 million level. Its market share was 35.5 percent, which slightly increased 1 percent as compared to Q409.

Micron became the number three with $200 million Q109 revenue. Its 1Q09 ASP and shipment dropped. Micron owned 9.6 percent market share in Q109. The 1Q09 ASP of Hynix increased, but its shipment decreased due to production cut. The 1Q09 revenue of Hynix was $171 million and dropped 22.3 percent QoQ. Hynix’s market share also slid down to 8.2 percent this quarter.

Intel's 1Q09 revenue was $155 million and its market share slightly increased to 7.4 percent, which is a little better than in 4Q08. The 1Q09 revenue of Numonyx remained stable and was estimated to be $70 million. The 1Q09 market share of Numonyx was 3.4 percent, which also slightly increased from the previous quarter.

1H May NAND Flash contract price rose 0-12pc

TAIPEI, TAIWAN: The average NAND Flash contract price of 1H May, 2009, rose between 0 to 12 percent. In 1H May, following previous NAND Flash suppliers' allocation policy in April, upstream suppliers provided system makers as their priority and reduced allocation to memory card makers.

NAND Flash contract price slightly rose in 1H May due to China’s “Home Electronics down to the country side” policy, and restocking demand of 3G handset upgrade and copycat cell phone market, according to DRAMeXchange.

Due to as low as one-month visibility in NAND Flash market and sustained price surge over the past four months, most clients are more conservative in purchasing and keep observing current price trend. However, as NAND Flash suppliers will adjust 2Q09 output pace, DRAMeXchange expects the contract price to roughly stabilize in the short-term.

After mid April, both upstream and downstream NAND Flash suppliers and makers announced their 1Q09 earnings releases. Most upstream suppliers have still suffered from financial losses although the situation slightly improved when compared with 4Q08.

On the other hand, downstream handset and DSC makers also faced the worst shipment results both in QoQ and YoY. Looking into the previous shipment patterns, the number in 2Q will usually increase while compared with 1Q.

DRAMeXchange expects NAND Flash suppliers to continue to adjust their output growth rate and stabilize NAND Flash price to improve their profitability with gradually recovering downstream demand.

Fig. 1: Mainstream 16Gb MLC NAND Flash Contract Pricing Trend, Jan. to May, 2009