The NAND flash oversupply has affected contract pricing in second half of December 2007.

Contract quotes in the second half of December for 8Gb MLC chips dropped 13-25% to an average price of US$3.48, while 16Gb MLC chips saw a drop of 21-25% to US$6.52..

The falling NAND flash contract quotes are due Apple's strategy of decreasing its NAND flash orders in December every year, while 50nm based chips also entered volume production in the fourth quarter this year, aggravating the balance of supply and demand.

Although the market expected SSDs (solid state drives) would help ease the oversupply problem, the relative immaturity of SSD products meant that even with the large drops in NAND flash pricing, the cost of SSDs for notebooks is still too high, noted the sources.

Some module makers expect prices will have a chance to bounce back in January next year, since downstream makers have cleared up a lot of inventory. However, others expect the imbalance will continue as NAND flash production will increase in January.

By: DocMemory
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