Press Center

TrendForce: 1H’Nov. NAND Flash Contract Price Drops 5-7% due to Weak Q4 Demand


19 November 2013 Semiconductors Sean Yang

According to DRAMeXchange, a research division of TrendForce, the 1H’Nov. NAND Flash contract prices have dropped 5%-7% compared to 2H’Oct. This is mainly due to the weaker than expected demand for NAND Flash products during the traditional peak-fourth quarter as well as the manufacturers’ high inventory levels, which reduced the overall willingness to purchase new components.

Looking at the supply side, in the periods following the Wuxi plant’s fire accident, SK Hynix and Samsung each allocated a respective 30% and 5% of their NAND Flash capacity to DRAM. This caused the overall NAND Flash supplies to drop in 3Q13 and 4Q13, and led 2013 NAND Flash industry bit growth to be adjusted from 40.8% to 40.3%. The biggest reason for the downward NAND Flash growth is perhaps the unpromising market demand in 4Q13. Consumer demand has been mostly weak in the UFD market due to the underwhelming market penetration of USB 3.0 products. For the memory card market, demand failed to improve even when price reductions were implemented for the major NAND Flash products.

As for the system market, given that the global economy has been slow during 4Q13, many smartphone and tablet PC manufacturers have remained conservative towards the traditional Thanksgiving and Christmas sales periods. As a result of this, an increasing number of manufacturers are beginning to make downward adjustments to their target shipments. Along with the manufacturers’ high inventory levels, the conservative attitude displayed towards the market is essentially what’s causing the NAND Flash demand from system clients to be weaker than expected.

Taking into account the aforementioned supply and demand situations, TrendForce believes the 1H’Nov NAND Flash contract prices will continue to fall. Towards the end of 2013, the weaker than expected Q4 demand, the upcoming off-peak quarter, and the limited NAND Flash contract price momentum are all expected to the keep NAND Flash prices down.




 

 


Previous Article
Mobile DRAM to become mainstream in 2014
Next Article
TrendForce: Mobile DRAM to Become Mainstream in 2014, Global Revenue Increases by 14 % in 3Q13