NAND Flash contract prices for the fourth quarter of 2013 are set to fall despite a reduction in the global supply, according to industry sources.

　　The global supply of NAND Flash has reduced due to chipmakers' strategic moves to allocate more capacity for DRAM products. Nonetheless, end-market demand for NAND Flash has fallen at a faster pace than the pace of contraction in the supply, the sources said.

　　Chipmakers including Samsung Electronics reportedly moved to allocate more of their available capacities for the manufacture of DRAM chips earlier in the fourth quarter, as the global supply of DRAM memory had fallen short of demand due to a recent fire at SK Hynix' China fab. The sources expressed optimism previously that a possible reduced supply of NAND Flash could help mitigate the impact of a traditionally slow season for the consumer electronics market in the fourth quarter.

　　However, end-market demand for NAND Flash has been weaker than expected thus far in the fourth quarter, the sources observed. Sales of high-end smartphones continue to disappoint, dragging down overall NAND Flash demand, the sources said.

　　The NAND Flash market could suffer from a more severe oversupply in 2014, when new capacities at chipmakers are scheduled to go online, the sources also noted.