NAND flash prices are sliding on low demand

Flash makers will continue to restrict supplies to keep prices from crashing

The manufacturer's price for NAND flash chips slid 5% to 10% in the second half of August, and they're expected to continue downward over the next few months.

The average price for NAND flash is now $4.90 for a 64Gbit chip and $2.90 for a 32Gbit chip, according to TrendForce.

According to DRAMeXchange, a research division of TrendForce, NAND flash contract prices from manufacturers are weaker due to lower demand by laptop, tablet and even smartphone makers.

Mobile system makers who over the past year increased inventory of NAND flash for their systems are now backing off on new flash purchases, according to DRAMeXchange.

Currently, DRAMeXchange is projecting that fourth quarter flash capacity will grow by approximately 10% even as NAND Flash manufacturers continue to restrict supplies as a way to control prices. That's because many device manufacturers have already stockpiled NAND flash in preparation for higher sales, and as new flash plants come on line, supply will surge as demand will falls.

Even with new smartphones and tablets expected to launch this month September -- Apple has an event scheduled for next week at which it's expected to unveil new iPhones -- embedded flash capacity growth is still expected to be slack.

"This is mostly due to the conservative buyer attitude and the rise of low-cost smartphones and tablets," DRAMeXchange said in its research summary. "TrendForce believes it is highly likely that the September prices will continue to drop."

Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at  @lucasmearian or subscribe to Lucas's RSS feed . His e-mail address is lmearian@computerworld.com.

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