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【Market View】DRAMeXchange: OEM and Retail Channel Sales Weaker than Expected, 1HNov. NAND Flash Average Contract Price Continues to Fall


Published Nov.16 2011,15:25 PM (GMT+8)

DRAMeXchange: OEM and Retail Channel Sales Weaker than Expected, 1HNov. NAND Flash Average Contract Price Continues to Fall

According to DRAMeXchange, a research division of TrendForce, NAND Flash contract price for 1HNov. fell by 2-4%  due to OEM and retail channel sales that were weaker than expected. High-density product price declined, mainly caused by weak PC, smartphone, and tablet sales. The Thailand flood disaster affected not only HDD supply, but also negatively impacted DSC shipments, which in turn resulted in even weaker demand from the memory card market. Due to low demand visibility for Thanksgiving, Christmas, and Chinese New Year, as well as increased supply from NAND Flash chip suppliers’ migration to 2ynm-node class process technology, DRAMeXchange believes NAND Flash average contract price will continue to fall in 4Q.

Looking ahead, DRAMeXchange believes ultrabooks will play a key role in the future of the NAND Flash market. In order to reduce booting time and increase operating performance, due to cost considerations the majority of ultrabooks have currently adopted a hybrid HDD solution – a mix of HDD and SSD, using the SSD as a cache. Although the density of SSD used in ultrabooks is low for now, as NAND Flash process technology migrates to the 2ynm-node class and SSD unit cost falls to US$1/GB, DRAMeXchange foresees SSD will be used for “storage” instead of “cache”. This will significantly increase NAND Flash demand. Eventually, ultrabooks will progress to using pure SSD solutions. Therefore, ultrabooks sales will drive market demand for SSD and therefore NAND Flash. However, looking at the progress of NAND Flash suppliers’ technology migration, 2ynm NAND Flash chips will not be available for use in SSD products until 2H12 at the earliest. Thus, DRAMeXchange believes the NAND Flash market will still face an oversupply situation in 1H12.