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【Market View】1HMay NAND Flash average contract price roughly declined 1-8% due to the slow season effect

Published 2010-05-12 (GMT+8)

1HMay NAND Flash average contract price roughly declined 1-8% due to the slow season effect

Impacted by 2Q slow season effect and instability anxiety in partial financial markets recently, 1H May NAND Flash average contract price roughly declined 1%-8%. Currently cost-competitive TLC is mainly applied on the memory card and UFD products. Since 2Q is the traditionally slow season for memory card and UFD while TLC white-brand memory card supply is increasing, NAND Flash suppliers adjusted down 1H May TLC chip contract price 1%-8% at the purpose of promotion in slow season. Currently MLC is still broadly used in electronic system products given the better performance & reliability. Benefited from the relatively steady OEM orders from some system product customers to partially relax the impact from memory card & UFD slow season effect,  1H May mainstream MLC average contract price slightly declined 1%-3%, comparably stable than TLC price.

Currently memory card makers will tend to properly restock some NAND Flash required in 2Q slow season and gradually raise the procurement portion of TLC white-box memory card, which result in the less demand for MLC in 2Q10. However, NAND Flash suppliers will also appropriately control 2Q10 output growth to ease the impact for slow season effect. Moreover, NAND Flash suppliers expect the 3Q10 restock demand from system product customers to be better than 2Q10 so that it will help stabilize & enhance the following MLC pricing trend as well. Besides, the turbulences in some financial markets have been easing due to recent international collaboration efforts, which will help NAND Flash end-product demand sustain to recover in 2H hot season. Nevertheless, the mixed pro & con views held by suppliers & buyers toward the following pricing trend may pose the up-and-down consolidation conditions to last in the short term. However, we expect the price trend of different NAND Flash products will mainly reflect the different application demand required as well as cost-down benefits from different process technologies employed. We thus expect MLC price to demonstrate the relatively stable trend compared with TLC in 2Q slow season.

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