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NAND Flash Contract Prices Fall

Despite production cutbacks by manufacturers, contract prices for NAND flash memory fell in the first half of November, according to researcher DRAMeXchange.

Although NAND flash memory suppliers continue to tighten supply, NAND prices fell 1 to 5 percent for the first time in two months because of weak demand, the researcher reported.

NAND demand had been strong until November because of the use of NAND in media tablets, smartphones, notebook computers, and other portable devices. However, demand weakened in November and is expected to stay weak into the first half of 2013. With sluggish demand, NAND flash manufacturers will temporarily halt capacity expansion plans, according to DRAMeXchange.

For instance, flash memory manufacturer Toshiba reported that the 30 percent production cut initiatives it implemented will be extended into the second quarter of 2013. Whether production capacities return to full levels will depend on whether demand returns in 2013.

Total production volumes for 2013 will be mainly affected by manufacturing process migrations. Many manufacturers have been transitioning to 20 nm process technology from 25 nm. However, there have been yield issues which have prevented the manufacturing procedures from being efficiently utilized, according to the researcher.

As a result, DRAMeXchange reduced its NAND production growth forecast of 45 percent to 41 percent for 2013.