TrendForce: Strategic Supply Control and Inventory Restocking Results in Mixed Trends for 2HJul. Average NAND Flash Contract Price

According to DRAMeXchange, a research division of TrendForce, with NAND flash suppliers maintaining strategic supply control and buyers beginning to build up inventory in preparation for new product releases in the third quarter, 2HJul. average NAND flash contract price stayed mostly flat, with slight increases.
 
From the supply perspective, memory card and universal flash drive (UFD) prices stabilized and began rising in mid-May, but some NAND flash suppliers continued to maintain disciplined supply – Toshiba even announced a 30% capacity cut. Looking at demand, the arrival of many new smartphone, tablet PC, and ultrabook models in the third quarter is expected to stimulate inventory restocking amongst buyers. However, this year’s peak season effect will not be as strong as usual, and market visibility is low. Nonetheless, DRAMeXchange expects NAND flash contract price will remain on a slight uptrend in the short term.
 

 
Bearish Prospects: 3Q12 UFD Market to See Little QoQ Growth
 
While the third quarter is historically the peak sales season, affected by the following factors, the UFD market will see minimal growth compared to the second quarter:
 
1. As eurozone debt issues continue to affect global economic recovery, growth in Europe, the U.S., and emerging regions will be weaker than expected, which will in turn limit domestic consumption.
 
2. Next-generation USB 3.0 products were initially expected to stimulate sales in the second half of the year, but with the delayed release of Intel’s Ivy Bridge processor, USB 3.0 demand will likely be pushed back as well.
 
3. Recently, NAND flash suppliers have adopted strategic supply measures, making it more difficult for NAND flash modules makers to purchase materials. Therefore, UFD product price is likely to continue rising, but shipment volume may not be enough to meet client demand as NAND flash supply tightens.