NOR flash memory will usher in price cuts, and suppliers will cut prices by 3%

Industry insiders revealed that the contract price of NOR Flash may decline in the second half of 2022. Among them, the price of low-density chips has begun to decline in the second quarter. 

The recent slowdown in demand for mobile phones, personal computers and consumer electronics has led to an uncertain demand outlook for the second half of the year, sources said, with downstream equipment suppliers facing increasing pressure to destock.

Negotiations on the price of the NOR Lightning contract in the third quarter have not been finalized, the sources said. Chip suppliers intend to lower their offers by 3%, while order cuts from branded equipment suppliers could give buyers more bargaining power.

Sources had previously been bullish on NOR flash prices this year as supply-side growth remained constrained. For example, in the case of a shortage of logic chips, foundries continue to adjust their capacity allocation to give more support to non-memory chip customers.

But sources pointed out that the coronavirus-induced lockdown in several major Chinese cities, worsening global inflation and other negative macro factors have adversely affected end-market demand, especially in areas such as consumer electronics, prompting brands to cut back Orders with suppliers.

Prices of NOR flash memory chips with densities ranging from 4Mb to 32Mb are being dragged down by weak demand for smartphones, especially those launched in China, the sources said.

The source also said that the price of high-density NOR flash memory chips will be relatively stable, mainly driven by demand for networking equipment. However, long lead times for networking equipment are limiting overall growth in demand for high-density NOR flash.

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