Josephine Lien, Taipei; Esther Lam, DIGITIMES [Friday 9 November 2007]
Some NAND flash customers of Samsung Electronics are unhappy about the pricing environment and say that there is no reason for them to procure chips from contract suppliers if the prices they quote are higher than spot prices with the price to trend weaker onwards.
According to figures revealed by DRAMeXchange, contract prices of NAND flash still headed south in the first half of November, especially for the high-density multi-level cell (MLC) segment. The overall price drop, however, weakened on a sequential base.
Some customers of Samsung complained about the pricing environment, as rapid price declines emerged once they procured from the Korean chipmaker during July and August, which in turn aggregated their costs further. While some of these customers found no reason to procure in large volumes in light of a further price drop, those who thought Samsung was quoting too high shifted procurement to Hynix Semiconductor.
Industry sources from Taiwan's memory sector said the price hike that industry players suffered during July and August complicated the ongoing price negotiations between chipmakers and downstream customers and a mutual consensus over a suitable pricing could hardly be made. Some thus shifted to sourcing from Hynix rather than purely rely on Samsung, the sources said.
Sources at memory module houses believe that a further price drop will be seen, as Apple's booking amount for December will be only half of the amount the company had as compared with the seasonal upturn before. They explained that the trim in order volume is because the recent procurement of Apple is scheduled to meet demand in the first quarter of 2008, which is also the transitional slow season.
Source: DRAMeXchange, compiled by Digitimes, November 2007
Source: DRAMeXchange, compiled by Digitimes, November 2007
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