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Bearish or Bullish is still unknown about the NAND Flash market, says DRAMeXchange

4 March 2009 Semiconductors

Taipei, Feb. 24th, 2009 – The 2H February NAND Flash contract price showed uptrend, but the spot price had already started sliding down. DRAMeXchange stated that the current market trend is still unsure and the market is filled with the atmosphere of wait-and-see. The buyers wouldn’t rush in and buy at this point.

According to DRAMeXchange, the contract price of 2H February mainstream MLC NAND Flash was up 8% to 36%, and the SLC contract price remained unchanged. The price rally was due to the Q109 international vendor capacity cut effect and the rush orders.

On the spot market side, DRAMeXchange stated that the NAND Flash spot price has shown downtrend and the market is filled with wait-and-see atmosphere. Because that some customers switched orders to other vendor, signs showed traces of shipment control since the agencies tried to stabilize their major clients, and had stimulated the NAND Flash spot price to go up. After the price rally, market participants started to evaluate the quantity and the time length of shipment control, and drove the price to a stagnant status.

According to DRAMeXchange, since the freezing demand at the year end of 2008, the NAND Flash contract prices mostly fell to some point close to their variable costs, and the NAND Flash vendors were facing the difficulty of maintaining normal operation. Therefore many vendors started capacity cut, which had improved the oversupply situation of 1H09, and had driven the recent contract prices to rebound to their cash costs and above. But while closing to March, which is the traditional slow season, the future price trend will depend on the strength of demand. Meanwhile, with the decreasing cost driven by the process migration, the future price will gradually reflect this factor.

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