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Taiwan − Contract prices for NAND Flash fell by about six to nine percent in the second half of July due to weaker than expected demand in the NAND flash market, ending the market's upward price trend, according to DRAMeXchange, a research division of TrendForce. Market demand in the third quarter is "more sluggish than expected," resulting in smartphone, tablet, and notebook manufacturers revising their shipments downward, said the market research firm.
This is a significant change from the first half of July when prices remained flat, although there were signs of slowing demand heading into the second half of 2013 from OEM customers and the channel.
Currently, NAND Flash manufacturers are facing increased pressures related to purchase orders and inventory level adjustments. "Even if the new mobile products released in 3Q13 manages to generate pull-in momentum and improve Q3 NAND Flash demand, the NAND Flash maker's overall performances are still likely to fall short of expectations," said TrendForce.
In the memory card and UFD market, module manufacturers have limited resources due to the tightening supply of NAND Flash, said TrendForce. These module makers typically accepted the high prices set in the first half of 2013 to avoid potential shortages. The bad news is that Q2 UFD shipments were weaker than expected, which is continuing into the third quarter. NAND Flash contract prices are expected to drop further in August.
However, NAND flash suppliers increased revenues by 11.2 percent quarter-over-quarter (QoQ) in the second quarter, and by more than 30 percent year-over-year (YoY) primarily due to higher contract prices and steady shipments of eMMC and SSD, according to TrendForce. Total revenues in the second quarter reached $5.78 billion.
In the second quarter, Samsung ranked first with $2.2 billion in revenue and a 37.8 percent market share. Samsung increased its bit shipment by five to ten percent in the second quarter, while average selling prices (ASPs) dropped less than five percent. Toshiba followed with $1.7 billion in revenue and a 28.7 percent market share. The manufacturer increased its NAND flash revenue by 10.6 percent QoQ thanks to higher NAND Flash pricing, depreciation of the Japanese yen, and its increasing eMMC and SSD market share, said TrendForce.
Rounding out the top five are SK Hynix with revenue of $840 million and a 14.5 percent share of the market; Micron with $678 million in revenue and an 11.7 percent share, and Intel with $413 million in revenue and 7.2 percent of the market. TrendForce said SK Hynix edged out Micron to take third place due to its strong eMMC and eMCP shipments. SK Hynix bit shipment volume grew to 29 percent, while ASPs increased by five percent.
The NAND Flash market is back on track, according to TrendForce. The market researcher doesn't expect dramatic price fluctuations in the market, and projects continued demand for SSD, eMCP, and eMMC into the future.
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