 1Q 2009: NAND Flash Prices Go Up
After a major price increase of NAND flash memory prices around the end of December last year, when the price for 4GB and 8GB went up by around 15% to round off the seasonal sales of 2008 and further flush out inventories of mid-stream players and smaller plants, the last couple of days have shown a serious price increase of up to 40% on 4GB and 8GB NAND flash memory, and this just in time before the market halts for the annual Lunar New Year celebrations.
We take a closer look at what's going on the turbulent NAND flash memory market and let you know of the current movements. These days are full of action...
During the last week the NAND flash market was hit by a steep increase of spot-market prices for 8GB and 4GB multi-level cell (MLC) NAND flash. Wholesale prices for USB flash drives and bulk volumes of SD cards, especially the 4GB and 8GB capacities have gone up significantly. Also reporting about this is price hike for USB flash memory is DigiTimes in Taiwan. We're now witnessing a major restructuring of the NAND flash memory market:
Main players such as Toshiba and SanDisk are reducing their production output and their 200mm and 300mm wafer production, while other core players like Hynix are closing down entire production lines and several of the main production lines and even entire NAND flash plants in order to meet the lower market demands. This is stirring up the entire NAND flash memory market and cause for several of the upstream suppliers and manufacturers of USB flash drives to shift much of their flash memory purchase over to NAND manufacturers such as Intel, Micron and Samsung. As Hynix seems to withdraw entirely from the spot-market and concentrate their remaining production on meeting their clients demands on the contractual NAND flash market, we now see Intel taking a new lead position on the market with their newer generations of USB flash memory solutions. Also traded more frequently by main wholesale players are Micron chips, with Intel offering highly competitive flash memory for the higher capacities of 4GB, 8GB and 16GB while Micron flash usually tends to make a better offer for high-speed MLC NAND flash for the lower capacities up to 4GB.
USB flash drive manufacturers and suppliers further downstream have used this price hike to flush their remaining inventories after the 4Q sales while avoiding new inventory. We've also seen several of the medium-sized USB flash drive factories, B2B wholesalers and USB flash drive suppliers to jump on this wagon and further increase flash memory prices.
As the seasonal sale from 4Q 2008 quickly cooled out in early January and left many of the smaller players with over-capacities or stocks and in need for more orders, they helped further push up the price trying to increase margins, while already preparing for an early production halt in good time before the traditional New Year celebrations.
It will be interesting to see how the USB flash prices are going to develop after the market opens again during the first week of February, as China returns to work for a strengthening Year of the Ox in 2009.
Our friends over at DigiTimes on Taiwan refer to the statement of En-Min Jow, chairman of Phison Electronics, a renown IC and NAND flash memory solution provider, who said in an interview that he expects prices to continue to go up further throughout February, with a slowing down first in March, as low stock levels and returning downstream demands restores the supply/demand balance and USB flash suppliers again start to turn up production outputs. Other well known players on the Hong Kong NAND flash memory markets see the price increase also as a combined reaction from the spot-market on the international financial situation in combination with a common increase due to the Chinese New Year and the restructuring of the industrial sectors in Shenzhen and entire Guangdong Province. As many factories in the labour intense light-industries have closed down and moved their production further inland or to neighboring low-cost countries time is now up for a sharp shift and a stronger focus on high-technology sectors and innovation.
In a time where weakened demand from the core markets in the US and Europe adds extra pressure to all players on the NAND flash memory market, it's not easy for the smaller players to survive or even improve competitiveness by optimizing processes and supplying better quality products and services.
 Quality Management & Innovation
In terms of market competition this new year of 2009 will certainly be a very exiting year, and we'll most likely be able to monitor more turbulence on the NAND flash spot-market. With a strong focus on cost controlling, continuous development and streamlining of internal process, while at the same time implementing new network technologies and improved purchase and quality management systems, we at MemoTrek look upon this new year as a year of opportunities and hard work where success is built one step at a time. We seek to reduce our environmental impact and strive to grow into a sustainable corporation that can make long-term contributions to those who are committed to changing our world into a better place.
You'll benefit from our rich experience on the market and our close ties with the all the main wholesale USB flash drive suppliers and manufacturers in China and Hong Kong, and we guarantee you that we at MemoTrek will use our market advantage and upstream position to further secure your interests and offer you the best possible solutions of A-grade Intel, Micron or Samsung flash memory chips to the most favorable conditions available for quality bulk wholesale of promotional USB flash drives.
Ask our Sales Team for more information on wholesale purchases of USB flash drives
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