Quarter-End effect impact on mild 1-6% decline for 2HJune mainstream NAND Flash contract price

2HJune mainstream NAND Flash contract price mildly decline 1-6% while others prices remain flat. Although some suppliers receive the stable orders from some system product customers to partially ease the impact from slow season and quarter-end effect, yet vendors adopt price promotion to handle the inventory adjustment in quarter-end. That is, 2HJune 64Gb & 32Gb MLC NAND Flash contract prices decline 4-6% while 64Gb & 32Gb TLC NAND Flash contract price mildly drop 1-3%.

Impact by the dynamics from some European financial markets in 2Q10, the slow season effect is expected to last into July. However, we see restock demand from system products and memory cards will gradually warm up in late July as downstream clients’ inventory level will gradually lower as well. Also, satisfactory iPad and iPhone 4 launch sales will also trigger other competitors to develop & launch new tablet PCs and smart phones in 2H10. We expect those new products to help digest the increasing output portion of 3X & 2X nm process technologies as well as TLC products in 2H10. This situation will turn the sufficiency of NAND Flash market from slight over-supply in 1H10 to mild shortage in 2H10. That is, we forecast mainstream NAND Flash contract price will likely stabilize and rebound after July.