NAND flash contract prices continued their downward trend in early April, due to low demand visibility, according to industry sources. Prices are set to fall throughout the second quarter.

NAND flash prices have been decreasing since 2012 due to sluggish end-market demand, the sources indicated. Suppliers' faster-than-expected production ramp-ups are the other factor causing prices to edge down, the sources said.

Major chip producers have moved to build products using their newer 2Xnm and 19nm process technologies, which boost their output. Demand, however, has failed to catch up with supply.

With chip prices slipping below costs, suppliers are now looking for strategies to maintain price stability, such as to reduce price competition, the sources pointed out.

NAND flash prices should start to rally in the second half of 2012, when demand for embedded storage solutions used in smartphones and tablets, and SSDs will likely boom, the sources believe. The current oversupply is expected to be short term.

Thanks to more diversified target applications, NAND flash will see its market size outpace that of DRAM in 2013, according to a recent Gartner report.