According to DRAMeXchange, a research division of TrendForce, as the replenishment demand for Chinese New Year has been determined for the most part during mid-January, numerous module manufacturers, in targeting the overall demand for 1Q13, will seek to re-enter negotiations following the holidays period. This will negatively impact 2HJan demand and, in turn, cause it to go on a noticeable downtrend. With regards to price, seeing how NAND Flash manufacturers are sticking to their usual supply control routines, and taking into account the sluggish market transactions resulting from the intention of buyers and sellers to engage in post-New Year negotiations, the NAND Flash contract prices are forecasted to exhibit a flat trend throughout 2HJan.
In response to the NAND Flash vendor's 4Q earnings report and their general perspectives towards 1Q13, we have come up with the following observations: 1) Following the rapid growth of smartphone and tablet PCs, demand for system products such as eMMC, eMCP, and SSD have begun to grow on a daily basis. As a result, NAND Flash vendors have continued to increase the proportion of their system products, which currently accounts for over 80% of total shipments; 2) Affected by the volatile nature of the end-market, NAND Flash suppliers are exercising caution over their capital expenditures. Compared to the previous year, 2013 Wafer volumes will increase only slightly, whereas the changes in bit growth will depend on the status of the migration progresses and the improvements to the 1xnm yield rate.
While NAND Flash prices have been stabilizing since 3Q12, NAND Flash manufacturers are continuing to have reservations about the market. 2013 bit growth, on the whole, is predicted to be approximately 40-45%. According to TrendForce's data, output growth for the first quarter of this year will only be about 5-6% higher than that during 4Q12.
Regarding the post-Chinese New Year NAND Flash market, although 1Q13 production has been increasing at a slower rate, demand is expected to soften due to the seasonality effects. It is predicted, as such, that the market will end up being in a state of oversupply. With the price momentum becoming weaker, the NAND Flash contract prices are expected to go on a gradual downtrend.