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Capacity cuts boost NAND Flash market morale

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According to DRAMeXchange, in addition to the fact that the memory card and universal flash drive markets are seeing sluggish demand, the release of certain software and hardware components has been delayed. As a result, new models of some NAND flash application products (such as smartphones, tablet PCs, and ultrabooks) will not hit the market until late August to early November, and the NAND flash market will continue to experience oversupply in the third quarter.As NAND flash suppliers experienced significant profit cannibalization due to the continuous decline of NAND flash price in the first quarter of 2012, manufacturers are planning to slow output growth in the second half of the year to reduce the NAND flash market supply-demand gap.It is under such bleak market conditions that Toshiba announced today it will cut capacity by approximately 30% at its Yokkaichi fab, in hopes of helping the market achieve balanced supply and demand before the arrival of the fourth quarter peak season.TrendForce expects Toshiba’s temporary capacity reduction will benefit the oversupply situation in the third quarter as well as rally NAND flash industry confidence needed to help stabilize market price. However, as the majority of vendors are still uncertain towards fourth quarter sales, the price trend will still depend on actual market demand as well as other suppliers’ capacity adjustment plans.According to TrendForce data, in the first quarter of 2012 Samsung led the NAND flash industry with 33.9% market share, while Toshiba was in a close second with 32.9% of the market.


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