Contract prices for NAND flash memory fell about 14% in February to reflect an oversupply in the market, according to DRAMeXchange. The situation will likely persist through the third quarter of 2014.

NAND-chip suppliers have employed aggressive pricing strategies, as system OEMs continue to adjust their inventories and slow their orders during the off-peak season, said DRAMeXchange. As end-market demand is unlikely to pick up until later in the third quarter, the oversupply will remain causing chip prices to fall further, the price tracker indicated.

NAND flash demand will be stimulated by the rollouts of Apple's next-generation iPhone and iPad devices, as well as new smartphones and tablets from other brands, during the third quarter of 2014, DRAMeXchange noted.

On the supply side, Samsung Electronics and Toshiba have moved to decelerate the pace of their capacity expansions, DRAMeXchange observed.

Though Samsung has started operating its new NAND flash plant in Xian, China in the first quarter, its focus on improving production yield rates will not have a significant impact on the global supply this year, DRAMeXchange said. Besides, it would take some time for Samsung to receive verification for its 3D NAND products produced at the facility, DRAMeXchange added.

Toshiba will complete the construction of Phase 2 of Fab 5 in the third quarter of 2014. Trial production at the new facility is expected to kick off in the fourth quarter, DRAMeXchange said.

Toshiba previously remarked that the expanded facility will focus on chips fabricated with advanced process technologies for 3D memory.

For the first quarter of 2014, the global NAND flash supply bit growth will reach 6% sequentially while growth in demand will be lower at only 1.1%, DRAMeXchange estimated.

By: DocMemory
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