NAND Flash prices dip by 2-10% in May

Taiwan — Contract pricing for mainstream NAND flash fell by roughly two to ten percent in the first half of May, according to DRAMeXchange, a research department of Trendforce. Inventories also remain high due to earlier speculative buying right after the Japan earthquake in March, said the market research firm.

Several factors will impact the NAND flash market over the second quarter, according to DRAM eXchange. These include a slow season in May and June, uncertainty in the global economy, demand for tablet PCs and smart phones primarily from a few major players, and adoption of an aggressive pricing strategy to lower the inventory level in June.

Lowering NAND Flash prices before system product makers launch new models late in the third quarter of 2011 will encourage a higher capacity of embedded NAND Flash storage, said DRAM eXchange.

DRAM eXchange also points out that the supply of raw materials for NAND Flash was not impacted by the Japan earthquake, and the migration to 2xnm boosted NAND Flash bit supply.

Upshot: DRAMeXchange expects NAND Flash to be oversupplied in May, thus fueling price declines in the second half of the second quarter.