NAND Flash price drops up to 16%

According to DRAMeXchange, a research department of Trendforce, despite of the sluggish market in retail memory card and UFD in the second half of May, most NAND Flash system OEM demand has also weakened.

Resulted from the aggressive pricing strategy from some NAND Flash vendors as approaching the end of the quarter, mainstream NAND Flash average contract price has shown an 8 to 16 percent decrease in the second half of May.

Most end customers had replenished inventory in April given the concern of supply shortage from Japan Earthquake. However, the off season surfaced only after May 1 labor's day in China. Towards the end of second quarter, most customers showed little interest in purchasing. Moreover, NAND Flash vendors were barely affected by the Japan earthquake. With the 2xnm migration accelerated output in the second quarter this year, the over-supply status in May and June has worsen. Some end customers are monitoring the third quarter order status followed right after the 2011 Computex and also monitoring new system product models scheduled to launch in the second half of this year.

A press release from DRAMeXchange said, "The off season low price could encourage system product customers to boost the NAND Flash storage in second half of the year. We expect NAND Flash market to remain dull in the second quarter. While inventory replenishment will be initiated in mid-July when end customers needed to build up inventory for sales season and launch of new products. Thus, June NAND Flash contract price will continue to drop due to the Fujiwhara effect of the off season and quarter-end phenomenon combining together."