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.

Latest NAND quarterly insights now available

DUBLIN, IRELAND: Research and Markets has announced the addition of the " NAND Quarterly Insights Q2/09" report to its offering.

NAND Quarterly Insights is a quarterly supply-demand forecast published four times a year which includes vendor shipments, roadmaps, wafer capacity, capex, and application forecasts out to the year 2014. Actual die sizes and projected die sizes for MLC, 3-bit per cell and 4-bit per cell NAND flash by vendor and costs for SLC, MLC, 3-bit per cell and 4-bit per cell NAND flash by technology node are also provided.

The first half of 2009 witnessed strong price increases due to reductions in fab capacity utilization, however suppliers have started increasing wafer capacities as they gear up for seasonal demand in the 2nd half of the year and fulfilling Apple's NAND demand.

The additional output is likely to put pressure on pricing in the latter half of 2009 extending into 2010. Profitability will remain a challenge for NAND flash suppliers in 2009.

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.

iPhone 3G S launch will help stabilize NAND Flash price in slow season

TAIPEI, TAIWAN: NAND Flash contract price showed up and down in 1HJune, while the contract price for mainstream high-density MLC chips slightly declined 1 percent to 6 percent due to the slow season and quarter-end effects, says DRAMeXchange.

Source: DRAMeXchange

The period of May-July is traditionally regarded as the slow reason for NAND Flash related products such as memory card and UFD. Therefore, the market demand is comparably weak. Given the over one month inventory level along with the quarter-end effects, memory card makers show less incentive in NAND Flash re-stocking.

On the other hand, NAND Flash suppliers offered price discount to customers during Computex Taipei Show in early June. It’ll help downstream clients to engage in sales promotion in slow season. Therefore, it resulted in the slightly price decline trend in mainstream MLC contract price.

Source: DRAMeXchange

DRAMeXchange states that currently NAND Flash suppliers still will try to stabilize price during NAND Flash slow season in order to improve their profitability. However, price is expected to be influenced by the quarter-end effect and weaker demand in slow season.

Apple officially introduced new iPhone 3GS on June 8 and new iPhone will hit the American market on June 19 and gradually deliver to other countries in the near future. The pricing for 16GB model is US$199, US$299 for 32GB model and US$99 for 8GB iPhone 3G.

The launch effect is expected to have positive impact on NAND Flash market despite of about 5 percent consumption of total NAND Flash demand in 2H09. Given these positive and negative factors to NAND Flash market, NAND Flash contract price is likely to slightly soften or stay stable in the short term.

The contract price is expected to stabilize and gradually rise when the re-stock demand can gradually recover in the traditional hot season.

2H May mainstream NAND Flash MLC average contract price slightly declined 2-6pc

TAIPEI, TAIWAN: NAND Flash contract price remains flat in 2H May. Some mainstream MLC average contract price has slightly declined 2 percent to 6 percent due to the high density products promotion by some vendors in Mid-May,says DRAMeXchange.

Fig.1: 32Gb MLC NAND Flash Contract Price trendWith the coming quarter end, some vendors already initiated the promotion programs to lower their inventory level. High density NAND Flash MLC chips under new process technology have comparably favor discount than those low density chips under more mature process technology.

Therefore, the decline degree of the contract price “Low” for 32Gb MLC NAND Flash is larger than other NAND Flash chips in 2HMay. Meanwhile, some vendors keep making effort on the contract price stabilization to improve profitability since they still treat system maker customers as the shipment priority and result in the flat contract price “High” of 32Gb MLC NAND Flash in 2HMay.According to DRAMeXchange.

As for the demand side, DRAMeXchange states that May and June are perceived as the slow seasons for NAND Flash end products such as memory card and UFD. Some downstream clients are expecting for lower chip price for the sake of promotion in summer break.

Fig. 2: 32Gb MLC NAND Flash Spot Price trendHowever, the 2Q09 profitability has turned to the first priority of the suppliers and stable chip price in June is the clearly intension. The mindset difference toward future price between buyers and suppliers has resulted in the recent fluctuation and consolidation in spot market.

The June contract price is likely to remain flat or might slightly soften due to the tug-of-war status between both sides.

MLC NAND Flash contract price surged up 8-18 percent in 2H April

TAIPEI, TAIWAN: In 2H April, the mainstream MLC NAND Flash contract price went up about 8 percent to 18 percent reflecting the inventory replenishment demand of system clients and China mobile phone market and the continuing supply controlling of NAND Flash vendors, DRAMeXchange says.

The NAND Flash downstream system clients mostly replenish their inventory quarterly and therefore require higher procurement quantity than the memory card clients. After the decreasing of downstream system client inventory level in Q209, the inventory replenishment for the beginning of Q309 new products has started.

DRAMeXchange states that since the NAND Flash vendors has set NAND Flash downstream system clients and their co-ordinating partners with higher supplying priority, the total supply to UFD and memory card clients has decreased. While facing low inventory level and worrying about insufficient sources for buying, the memory card makers are now more agreeing to the contract price raise.

Meanwhile, the China Home Appliance Subsidy Policy, 3G upgrade, Pirate phones, and the pre May 1st labor day inventory replenishment all making the effects of China rush orders after lunar new year and inventory replenishment sustaining.

On the other hand, after the price came back close to their wafer cost, the NAND Flash vendors still keep controlling their outputs and tend not to increase Q209 wafer outputs in order to maintain the stable market price and improve their profitability. These are two additional reasons that supported the April price keep surging.

Analyzing the spot price trend of the mainstream chip 32 Gb MLC, after the NAND Flash price has rallied quickly since Q109, the recent uptrend has started consolidating. This is mainly reflecting the concerns of whether the rush orders of system clients will sustain after May and how the May 1st holidays sales will perform.

Currently the electronics end product vendors are expecting the short term orders to sustain until June and the NAND Flash vendors tend to slowly increase the May contract price.

If the June demand is lower than expected, they will try to stabilize the price in order to improve their profitability and give time and space to the memory card clients for them to adjust the memory card prices. Therefore the 1H May contract price of mainstream NAND Flash MLC is expected to raise another 5 percent or more. According to DRAMeXchange.