As NAND flash prices have kept falling since the end of 2011 due to oversupply, Taiwan-based vendors of flash memory have suffered continued drops in prices of flash cards and pen drives, especially Class 4 SD and MicroSD cards as well as 2GB and 4GB modules, and consequently have declined shipments at too low prices, according to industry sources.

Transcend Information, a Taiwan-based maker of memory modules, has taken a strategy of not selling products at a loss and has focused marketing on memory products of niche markets and special specifications, company chairman Peter Su said.

NAND flash makers have considered reducing production to ease oversupply, but are worried that such decreased output will occur shortly before the traditional peak season in the third quarter if reductions start in the second, the sources indicated.

The NAND flash industry has rested hopes of a market rebound on eMMC used in smartphones, tablet PCs and ultrabooks as well as SSDs, but the rebound is expected to not occur until the second half of 2012, the sources said.