NAND prices tick up

On the back of recent spot market strength and numerous production cuts, NAND contract prices have edged up for the first time in months.

LastUpdate:Dec.24 2008, 16:20 PM (GMT+8) Flash Contract Price (2H Dec.)

 

Type	Item	High	Low	Average	High Change	Low Change	History
	NAND 16Gb 2Gx8 SLC	12.00	11.50	11.78	(0.00%)	(0.00%)
	NAND 8Gb 1024Mx8 SLC	5.20	4.00	4.56	(4.00%)	(8.11%)
	NAND 4Gb 512Mx8 SLC	3.10	2.20	2.62	(0.00%)	(10.00%)
	NAND 16Gb 2Gx8 MLC	2.10	1.80	1.92	(16.67%)	(20.00%)
	NAND 8Gb 1024Mx8 MLC	1.30	1.05	1.17	(8.33%)	(10.53%)
	NAND 4Gb 512Mx8 MLC	1.10	1.05	1.08	(0.00%)	(0.00%)

 

As mentioned earlier this week, Sandisk is the only stock that makes much sense buying in the memory space. It generates substantial income from its patent portfolio – the stock's market capitalization is roughly 5* its trailing royalty stream. Admittedly, that royalty stream is in some degree of jeopardy in that Samsung is expected to stick Sandisk with lower royalty rates next year. The retail market for cards has been very weak. I think NAND will remain firmer than other aspects of memory as there is stacking opportunity there – lower prices means larger capacity moves into the market at more affordable prices relative to hard drives. In DRAM, PCs cap out at roughly 4 gigs. Theoretically the capacity opportunity in NAND is much larger as flash can take share from hard drives due to its smaller form factor. Non-mechanical storage has a durability benefit in portable applications as it has no moving parts.

It's encouraging to see prices pick up. I don't have a great sense of NAND card inventory at retail – it may be just a blip. I'm long some Sandisk.