Memory chip prices are likely to rise at a slower pace in February, as buyers in China are holding a wait-and-see approach, according to industry observers.
The coronavirus outbreak has led to strong wait-and-see sentiment in the China market, the observers indicated. Recovery in memory chip prices may be suppressed, the observers said.
Memory contract market prices for the first quarter of 2020 have already been negotiated and are set to rally. Stability will show in the contract quotes for the second quarter, thanks mainly to suppliers' output controls, the observers noted.
Memory chipmakers have been conservative about building additional capacities, while buyers in the channel market are reluctant to sell in anticipation of price increases, the observers continued.
Besides, China-based memory chipmakers have claimed production remains normal despite the ongoing outbreak. Meanwhile, for non-China-based vendors which also run fabs in China, production lines are still operated under precautionary measures taken internally. Therefore, some observers believe that the outbreak will have a limited impact on China's overall memory chip output.
According to research firm ChinaFlashMarket (CFM), NAND flash prices will rise at a slower pace in February as suppliers' less-aggressive capacity expansion plans have resulted in insignificant output growth. Prices will still depend on suppliers' intention of building additional capacities.
Coronavirus outbreak causes demand uncertainty
Photo: Digitimes file photo
Article translated by Jessie Shen
