Contract prices for NAND flash memory are likely to decline further in the fourth quarter of 2010, as there are still uncertainties in the market, according to industry sources. Chip vendors are faced with low visibility on orders while demand in the retail channel remains weak.
Module makers have been cautious about placing orders for China's National Day holidays, with some still suffering from high inventory levels, the sources indicated. Several China-based distributors have lowered prices to stimulate demand, the sources added.
The sources also observed that order visibility for chip suppliers, which have a higher dependency on sales to the OEM contract market, has extended to only early November.
In addition, major chip suppliers are raising output using 2Xnm processes, and also growing production of 3-bit per cell chips, which may place further downward pressure on NAND flash prices in the fourth quarter, the sources said.
Early September contract prices for mainstream NAND flash chips slid 5-10% sequentially.