TrendForce: Economic Downturn Periled Demand; 2H’Nov. NAND Flash Contract Price Declined 4-6%

According to DRAMeXchange, a research division of TrendForce, rush orders for SSD began to turn up in November as a result of the Thailand Flood, which compromised the HDD supply. However, the shipments of end-market products, including PC, smartphone and tablet PC, continued to drop. In addition, the memory card sales have been plunging on account of the periled digital camera supply affected by the Thailand Flood, not to mention the weak demand deriving from the horrid economic outlooks in Europe and United States. SSD’s rush orders alone were not enough to revive the NAND Flash market. Consequently, the contract price of NAND Flash in 2H’Nov dropped by 4-6% compared to that in 1H’Nov.



Moreover, major brand names such as HP, Acer, Asus, Toshiba and Lenovo have launched their ultrabooks in October and November. As for the new ultrabooks, with the exception of Acer’s S3 equipped with both HDD and SSD solutions, others adopt SSDs with capacities ranging between 64GB and 128GB. However, the high costs of Ultrabooks’ components and the wide price gap between ultrabooks and the mainstream notebooks in the market resulted in their underperformance in the market, which in turn caused the SSD’s shipment in 4Q11 to fall short of expectations. According to TrendForce, in order to widen the price gap between Ultrabooks and MacBook Air, the Ultrabooks to be launched in 1Q12 and 2Q12 will adopt both HDDs and SSDs, a compromise between performance and cost.



Looking at the market afterward, considering the market’s conservative attitude towards the demand spurred by Christmas, the manufacturers have been withholding from stocking up. In addition, China’s economic recession and the uncertain global economic outlook will hurt the peak season of the Chinese New Year, which also contributes to the conservative attitude of the manufacturers. In the meantime, the production of NAND Flash makers’ 2ynm/1xnm process will increase considerably after December, which will bring a new challenge to the weak market demand. Therefore, TrendForce remains conservative about the NAND Flash prices, and expects the downtrend to persist in the short term.