2HFeb NAND Flash contract price remain partially flat and slight decline given the mixed pro & con dynamics

2HFeb. NAND Flash contract price partially remained flat or slightly declined. The market indicates the hesitation views given the complicated pro & con dynamics such as iPAD launch after-effect, inventory replenishment demand during the pre & post Chinese Lunar New Year period, slow-season effect and some macroeconomic & financial uncertainties in partial regions etc. that NAND Flash pricing momentum demonstrated ups and downs during the consolidation period over the past 2 months. Meanwhile, some NAND Flash suppliers intent to remain flat for the 2HFeb. contract price while some slightly adjusted down mainstream MLC NAND Flash price by 2-3% at the purpose of sales stimulation.

Despite of Chinese Lunar New Year holiday sales for NAND Flash application products remained stable, however, some end customers will cautiously restock proper volume to  control inventory level by the end of 1Q10 as well as the output portion of 3xnm node-based new products will be gradually raised by some NAND Flash suppliers after February. These unfavorable supply & demand factors have been hampering the procurement requirement & pricing momentum recently, however, the NAND Flash suppliers may adopt promotion strategies backed by the cost-reduction effectiveness from technology upgrade to help ease the slow-season & quarter-end effects and stimulate market demand. We thus expect NAND Flash contract price to indicate the mildly softened trend in the short term.