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Analyst: 2HJan NAND flash contract prices to flatten

Posted: 06 Feb 2013 ?? ?Print Version ?Bookmark and Share

Keywords:NAND flash? DRAMeXchange? eMMC? eMCP? SSD?

According to DRAMeXchange, a research unit of TrendForce, as the replenishment demand for Chinese New Year has been determined for the most part during mid-January, many module makers, in targeting the overall demand for 1Q13, will seek to re-enter negotiations following the holiday period. The market research firm stated that this will negatively impact 2HJan demand and, in turn, cause it to go on a noticeable downtrend.

With regard to price, seeing how NAND flash makers are sticking to their usual supply control routines, and taking into account the sluggish market transactions resulting from the intention of buyers and sellers to engage in post-New Year negotiations, the NAND flash contract prices are forecast to exhibit a flat trend throughout 2HJan.

In response to the NAND flash vendor's 4Q earnings report and their general perspectives towards 1Q13, we have come up with the following observations: 1) Following the rapid growth of smartphone and tablets, demand for system products such as eMMC, eMCP and SSD have begun to grow on a daily basis. As a result, NAND flash vendors have continued to increase the proportion of their system products, which accounts for more than 80 per cent of total shipments; 2) Affected by the volatile nature of the end-market, NAND flash suppliers are exercising caution over their capital expenditures. Compared to the previous year, 2013 wafer volumes will increase only slightly, whereas the changes in bit growth will depend on the status of the migration progresses and the improvements to the 1xnm yield rate.

While NAND flash prices have been stabilising since 3Q12, NAND flash makers are continuing to have reservations about the 2013 market where bit growth is predicted to be about 40-45 per cent. According to TrendForce's data, output growth for 1Q13will only be about 5-6 per cent higher than that during 4Q12.

Regarding the post-Chinese New Year NAND flash market, although 1Q13 production has been increasing at a slower rate, demand is expected to soften due to the seasonality effects. It is predicted, as such, that the market will end up being in a state of oversupply. With the price momentum becoming weaker, the NAND flash contract prices are expected to go on a gradual downtrend.

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