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NAND flash price to stabilize after August

Posted: 09 Jul 2008 ?? ?Print Version ?Bookmark and Share

Keywords:NAND flash price stabilization? NAND flash demand? seasonal downturn?

DRAMeXchange indicates that average NAND flash contract price of 2H June dropped at the range between 5-25 percent due to quarter-end factor. Market suppliers take strategic price-cut policy to lower their stock and stimulate the weaker NAND flash market demand. NAND flash price is likely to stabilize gradually after mid-July pushing by lower price, new demand from 3G iPhone, smart phones and low-cost PCs. Price is expected to rebound and stabilize as the traditional 2H season demand gradually recovers.

DRAMeXchange believes that the key factors behind the consistent price decline are:

Seasonal downturnBuyers are in lack of a strong incentive to make their procurement under a mixed market outlook where downstream players are also reluctant to grow their inventory level.

High crude oil priceConsumers are being discouraged under inflation pressure amid high crude oil price. Not only shopping incentive for new products has been discouraged, but also replacement demand.

Quarterly-end financial pressureVendors are more flexible over price bargaining amid inventory pressure concern.

Weak demand for memory cards

Pessimistic economic outlookThis implies an absence of a powerful catalyst to consumer electronics sales.

Figure 1: Spot price trend of 8Gb MLC NAND flash, June 2008.

DRAMeXchange foresees a stabilizing price trend is expected in Q3 08 because of several factors. First is the upcoming seasonality upturn for consumer electronics. Another factor is the Apple 3G iPhone shipments, which are expected to hit 12 million units as global telecom service carries will bundle sales in a more favorable package. Finally, the third factor is the low-cost PC market that is expected to materialize with shipments to hit 8 million units.

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