Oversupply of parts makes NAND flash prices fall

A SEVERE OVERSUPPLY of 3-bit-per-cell parts used for removable memory cards and USB drives has caused a temporary interruption of growth in the NAND flash memory market.

According to chip industry watchers at Isuppli, although NAND flash has been growing like topsy for five quarters thanks to strong demand and short supplies, global revenue from shipments of NAND flash memory dropped to $4.1 billion in the second quarter.

This 6.5 per cent fall was caused by 3-bit-per-cell (TLC) flash parts flooding the market. The technology allows the storage of three bits of information in each memory cell, tripling the density of a given flash device.

Since this type of NAND has enjoyed strong acceptance in memory cards and USB drives, no one wanted 2-bit-per-cell Multilevel Cell (MLC) and 1-bit-per-cell Single Level Cell (SLC) flash and prices dropped.

In addition too much production of TLC parts has resulted in these parts going into oversupply, causing prices to decline and bringing down revenue for the entire NAND market in the second quarter.

However after consulting its crystal ball Isuppli thinks that after the second quarter dip, the NAND flash market is set to return to sequential growth for the next five quarters.

Michael Yang, manager of memory and storage systems for Isuppli said that the NAND flash market is officially on a winning streak amid strong demand and short supplies. µ