DRAMeXchange: 2HDec. NAND Flash Contract Price Falls 3-8% Compared to 1HDec., Chinese New Year Inventory Restocking Conservative

According to TrendForce, as the market status remains unclear, some suppliers and buyers are not seeing eye-to-eye on price negotiations. Therefore, with few concluded transactions, 2HDec. mainstream NAND Flash MLC contract price fell by 3-8% compared to 1HDec. From the supply perspective, main suppliers’ technology migration progress has continuously advanced since the end of 4Q. TrendForce expects that after Chinese New Year, the proportion of new process technology shipments will gradually increase, and 2xnm-node SSD and eMMC will begin to ship for new ultrabook, smartphone, and tablet PC models after the upcoming Consumer Electronics Show (CES). From the demand perspective, as the past year saw weak demand for the back-to-school and year-end holiday seasons, makers’ inventory restocking demand was also lower than usual. In terms of the UFD market, as USB3.0 has not yet gained ground, market performance remains mediocre. As consumer electronics shipments have been weak and the Thailand flood disaster has impacted the digital camera supply chain, the retail memory card market has suffered. Furthermore, with an unstable global economy and shipments for system products such as tablet PCs and ultrabooks not performing as expected, restocking momentum has not been as strong as in previous years.





Looking towards the January NAND Flash market, with no clear, positive signs in terms of demand outlook, as well as fewer work days and an early Chinese New Year, TrendForce expects that NAND Flash contract price will continue on a slight downtrend in the short term. 1Q12 price will depend on Chinese New Year retail sales and inventory replenishment.

As for the mobile phone industry, according to TrendForce research, smartphone shipment volume reached 427 million units in 2011, a significant 50% increase compared to 2010. In 2012, benefitting from the rise of entry to mid-level smartphones as well as increased demand from emerging markets, shipments may grow to 592 million units. Additionally, the proportion of internal memory and OEM memory card capacity will gradually increase as cost decreases. As the mobile phone industry’s NAND Flash consumption volume is forecasted at 50% for 1Q12, TrendForce believes the smartphone industry will retain strong growth momentum, which will positively affect NAND Flash industry growth.