TAIPEI, TAIWAN: DRAMeXchange indicates that average NAND Flash contract price of 2H June dropped at the range between 5 to 25 percent due to the quarter-end factor. Market suppliers take strategic price-cut policy to lower their stock and stimulate the weaker NAND Flash market demand.

NAND Flash price is likely to gradually stabilize after Mid-July pushing by lower price, new demand from 3G iPhone, smart phones and low-cost PCs.

Price is expected to rebound and stabilize as the traditional 2H hot season demand gradually recovers.

DRAMeXchange believes that the key factors behind the consistent price decline are:

1. Seasonal downturn: Buyers are in lack of a strong incentive to make their procurement under a mixed market outlook where downstream players are also reluctant to grow their inventory level.
2. High crude oil price: Consumers are being discouraged under inflation pressure amid high crude oil price. Not only shopping incentive for new products has been discouraged, but also replacement demand.
3. Quarterly-end financial pressure: Vendors are more flexible over price bargaining amid inventory pressure concern
4. Weak demand for memory cards;
5. Pessimistic economic outlook that implies an absence of a powerful catalyst to consumer electronics sales.

DRAMeXchange foresees a stabilizing price trend is expected in mid 3Q08 because:

1. Upcoming seasonality upturn for consumer electronics;
2. Apple 3G iPhone shipments are expected to hit 12mn units as global telecom service carries will bundle sales in a more favorable package;
3. Low-cost PC market is expected to materialize with shipments to hit 8mn units.