DRAMeXchange: Demand Gradually Warms due to System Product Clients’ Inventory Replenishment, 1HSep. NAND Flash Contract Price Generally Stable

According to DRAMeXchange, a research division of TrendForce, as a portion of system product clients have begun inventory replenishment in preparation for 4Q11’s new products, mainstream MLC NAND flash contract price was more or less stable for 1HSep. Although memory card and UFD retail market demand was still relatively weak, price has ceased falling and stabilized. Although quarter-end effects from the end of 3Q will soon be seen, as many downstream clients’ inventory replenishment for the year-end peak sales season is expected to continue through mid-October, NAND flash contract price should be stable in the short term.



Looking towards the near future, related vendors currently have low visibility of 4Q market demand and are conservative towards year-end holiday sales on the European and U.S. market. Moreover, starting in 4Q as the proportion of NAND flash suppliers’ products produced via 2xnm-node processes increase, market bit supply will increase as well. Recent international discussion of multi-national cooperative solutions to ease the European debt crisis will likely thwart a second global financial crisis. Additionally, certain advanced nations have already proposed stimulus policies that should aid recovery of economies and employment rates worldwide. These measures should increase corporate investments and consumer confidence. Furthermore, the price of some key components has already decreased significantly this year, which will benefit system end-product from cost-down effectiveness as well as vendors’ price-cut promotion activities in the 4Q traditional peak season. This will in turn help the reduction of leftover inventory and sales of new tablet PC, smart phone and portable PC models. Future NAND flash price trend will depend on the interaction of the aforementioned mixed factors during the year-end holiday sales season.