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Tight NAND Flash supply will continue to November; Strong NAND Flash demand for smartphone and MP3/PMP system customers

17 September 2009 Semiconductors

Taipei,Sep.17th,2009----Since cellular makers launched series of new smartphones with embedded 8GB to 32GB NAND Flash and MP3/PMP makers recently launched new revised device equipped with embedded 16GB-64GB NAND memory for the sake of hot season demand in 2009, Tight NAND Flash supply will continue to November.Says DRAMeXchange.
Different from the over supply during 2006~2008, NAND Flash price has steadily remained stable upward trending in 2009 mainly due to the discipline supply control by NAND Flash vendors. Toshiba has lowered the utilization rate to 70% for their two 12” fabs and other vendors lowered utilization rate in 1H’09 as well. The discipline supply control reduces the risk of over supply. However, NAND Flash vendors have adjusted up their utilization rate properly to handle the inventory replenishment for year end hot seasons. System customers such as Apple, Nokia, Samsung, Sony, Palm and Microsoft are the priority for NAND Flash supply.
 DRAMeXchange states that so far this strategy is positive for NAND Flash vendors. Despite of less NAND Flash consumption respectively than memory card and UFD together, major NAND Flash vendors such as Samsung, Toshiba and Micron still regard those smartphone and MP3/PMP makers are the top priority customers. In 3Q09, NAND Flash consumption of major smartphone and MP3/PMP vendors accounts for 30%~32% of total NAND Flash demand and will be estimated to reach to 40%~42% in 4Q09, which is benefited from the climbing content per box of smartphone and MP3/PMP and higher shipment forecast in 4Q09.
 DRAMeXchane expects that the tight NAND Flash supply will continue until 2H’Nov, that is, NAND Flash price will remain stable and unlikely to drop in coming one to two months in general. Table-1 is our expectation on top 5 accounts in NAND Flash consumption in 4Q09. Apple consumed more than one-fourth of total NAND Flash demand due to 4Q09 iPod shipment forecast is expected to double the amount in individual quarter in year 2009 and iPhone 3GS launch in China market in 4Q09. However, DRAMeXchange will keep continue to watch since 4Q09 NAND Flash market will be impact by iPhone sales condition in China.

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