Price of NAND Flash Continues to Fall

In the last two week the contract prices have fallen by almost 10 percent

NAND flash contract prices are dropping at an alarming rate. That’s not bad for consumers, but the manufacturers suffer. Low profits mean less money for R&D, or even bankruptcy, as in the case of Elpida (DRAM memory manufacturer).

In the second half of April, contract prices continued the downward trend that started at the beginning of the year. The trend implies that companies slowed their buying rate, and overall end-market demand has not picked up.

The industry now hopes that NAND flash prices stop falling when the market for embedded applications, such as solid-state drives, eMMC and mSATA takes off, as that kind of devices require high-capacity NAND memory chips.

The market seems to be opening toward such applications, an example being MSI’s GT70 gaming notebook; but we'll have to wait at least a whole year until more applications like that come on the market.

The market for memory cards and drives is already quite saturated and has little room for further growth, and this is one of the reasons that the prices are tumbling.

According to DRAMeXchange, contract quotes for 64Gb and 32Gb MLC chips declined 3-5% on average to 4.66 USD and 2.54 USD, respectively, in the last two weeks of April.

The average contract price for 32Gb TLC NAND chips went down 8 percent in the same period, reaching the low level of 2.58 USD.

As the miniPC trend continues to develop – see Intel’s NUC and the Rasberry Pi for example –, the market for very small and thin SSDs is developing more, and the demand for high capacity NAND chip will stabilize, and so will the prices.

The downside is that this will take some time and, until then, the prices continue to fall.

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