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Press Release

DRAMeXchange indicates NAND Flash contract price likely to reverse in late 3Q

Wednesday , 08 / 13 / 2008

Taipei, August 12, 2008 --- According to DRAMeXchange, a downhill trend is seen in NAND Flash contract price market in 1HAug, with prices dropped by an approximate of 5-15% sequentially. The weakening price trend is primarily because of a consistent sluggish demand. A bounce in contract price is likely to occur in late 3Q when demand-supply status improves.

Demand for NAND Flash maintains low because: 1. most downstream players are still adopting a wait-and-see attitude for a possible demand recovery from the white-box applications market after the Olympics and; 2. procurement is put on hold under an anticipation that demand from both mature and emerging regions may recover after summer holidays.

Current demand visibility for 4Q is still low, therefore, most downstream players are being conservative over bookings, with some may even postpone their procurement. Downstream NAND Flash suppliers are still housing a high inventory level after some upstream vendors adopted a flexible pricing during quarter-end in late 2Q. Therefore, it is not surprising to see them to focus on digesting present inventory, further highlighting a dismal demand trend. The present supply glut, to a certain extent, has disturbed the supply-demand mechanism somehow.

As of 1H Aug, prices of 16Gb MLC NAND Flash has dropped over one thirds (~36%) to US$3.24, down from 1H Jul’s US$4.02 and 1H Jun’s US$5.06.

A warming-up demand is only likely during late 3Q, when the traditional seasonality for pre-stock procurement is expected to spur sales. Consider that Hynix has already made its second announcement about output trim (from 90-100% to 50-60%), an expected supply drop should encourage price to rise. Contract price is likely to reverse in late 3Q when demand and supply status gradually improves.


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NAND Flash contract price 16Gb MLC DRAMeXchange EN

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