2HJuly mainstream MLC NAND Flash contract price declines 0- 4% due to mixed market effect

2HJuly mainstream MLC NAND Flash contract price slightly declined around 0-4%. Due to the different customer mix and client demand for different NAND Flash suppliers, the mainstream MLC contract price continued to stay flat or slightly declined in 2H July.

Summer vacation is the traditional slow season for memory card and UFD makers. Since demand for inventory replenishment seems to be weak and cost-down efforts proved due to process technology migration, some suppliers tend to stimulate the purchase willingness with favorable price. However, some suppliers receive the order with larger volume for hot season from electronics system customers in 3Q09 that they continued to remain the stable price policy so that they can maintain the profitability. Therefore, some MLC contract price remained flat or mildly softened in 2HJuly.

Despite slow season pattern for NAND Flash main application products (such as memory card & UFD) will last into mid-August and NAND Flash suppliers receive long-term orders from some electronic system customers (such as handset & MP3 makers), the mix effect will lead to the demand status roughly keep stable in August. However, suppliers with different client & order mix and different shipment & utilization status will use different pricing strategy in the near term. We think that the mix of positive & negative market factors in supply & demand side will last into mid-August. Therefore, NAND Flash contract price may continue to show slightly ups and downs or stay flat in the short term.