DRAMeXchange: 2H’Sep. mainstream NAND Flash contract price dropped 1-10%, year-end holiday inventory replenishment after Mid Oct. is expected

DRAMeXchange: 2H’Sep. mainstream NAND Flash contract price dropped 1-10%, year-end holiday inventory replenishment after Mid Oct. is expected

Oct. 7th, 2010--2H’Sep. mainstream NAND Flash contract price declined 1-10% mainly impact by the quarter-end effect. Meanwhile, we see the pricing strategies are varied given the different customer mix and order conditions that NAND Flash vendors have. Demand for memory card and UFD was still somewhat flat in retail market as well as inventory replenishment demand from some China marketing channels was gradually declining in 2HSep. so that some memory card makers with higher inventory level did not intent to re-stock more before 3Q quarter end. Some NAND Flash vendors who have higher exposure in memory card & UFD still continued offering competitive price to help downstream clients on retail market demand stimulation via price-cut promotion events in 2HSep. However, still some NAND Flash vendors with higher portion in system product customers and more OEM orders received at hand barely mildly adjusted down the price or remained partially stable in 2H’Sep since some product price had been adjusted down in 1H’Sep.

We expect NAND Flash market will still be influenced by the following mixed signals :1) New smartphone and tablet PC with higher NAND Flash storage capacity launched by some system product customers before year-end Thanksgiving and Christmas holidays will partially help offset the relatively inactive demand from memory card and UFD clients in 4Q10. 2.) Most NAND Flash vendors will continue to increase the output portion of 3xnm & 2xnm new process technologies as well as TLC products while some suppliers may consider to slightly slow down the bit output growth to help weather the slow season effect in 1H11. 3.) Some NAND Flash vendors already continued adjusting down contract price significantly in September in order to stimulate the procurement demand ahead of 3Q quarter end. Moreover, they expect inventory replenishment from downstream clients for year-end hot-season sales to likely warm up from mid-Oct. to early Nov. That is, DRAMeXchange expect the price may demonstrate relatively stable or partially soften in the short term, given the wait-and-see market sentiment status quo.