NAND contract significantly higher

NAND flash contract prices soar by up to 40% in 2H January, says DRAMeXchange
Josephine Lien, Taipei; Jessie Shen, DIGITIMES [Friday 16 January 2009]

Contract quotes for mainstream 8Gb and 4Gb multi-level cell (MLC) NAND flash jumped by up to 40% and 33%, respectively, in the second half of January, latest quotes gathered by DRAMeXchange show. Meanwhile, contract prices for the 16Gb MLC NAND flash segment grew 2-8%.

The price surge has appeared as a result of suppliers' production cutbacks and lower 8-inch fab output, according to the research firm. In addition, demand for restocking inventory before the Lunar New Year will contribute to price stabilization for the near term.

Most contract prices of single-level cell (SLC) parts, whose demand has decreased, also rose slightly in the second half of January, DRAMeXchange said.

En-Min Jow, chairman of NAND flash controller IC designer Phison Electronics, said that a rise in NAND flash pricing is expected to continue throughout the first half of February. The price hike will start slowing down in March, as chip suppliers begin ramping up production on a restored supply/demand balance, according to Jow.

Mainstream SLC NAND flash contract prices, 2H Jan 09 (US$)
Item	High	Low	Average	High change	Low change
16Gb (2Gx8)	11.50	10.50	11.00	(4.17%)	(4.55%)
8Gb (1024Mx8)	5.00	4.00	4.50	2.04%	0.00%
4Gb (512Mx8)	3.50	2.50	2.98	16.67%	25.00%
Mainstream MLC NAND flash contract prices, 2H Jan 09 (US$)
Item	High	Low	Average	High change	Low change
16Gb (2Gx8)	2.70	2.20	2.46	8.00%	2.33%
8Gb (1024Mx8)	2.10	1.50	1.82	40.00%	15.38%
4Gb (512Mx8)	1.60	1.20	1.40	33.33%	14.29%

Source: DRAMeXchange, compiled by Digitimes, January 2009

The Skew: Contract and spot prices are generally in the same range now. Previously contract was significantly below spot. The good news is spot prices haven't given back their gains since jolting higher a couple of weeks ago. Production cutbacks should lead to higher NAND prices. Taiwan bailouts may quash a notional recovery as rejuvenated cash flow would likely lead to more production. Like Sandisk for IP royalty catalog though quarter is so bad I'm going to have to read about it through finger-covered eyes when they report.