The first sign of a price upside for NAND flash did not sustain any momentum, and the latest July quotes for mainstream density chips reflect an average 10% sequential drop amid the rumored delay of the high-density iPod nano, according to industry observers. Hynix Semiconductor and Samsung Electronics are also said to be provoking a price war, industry sources indicated.

,p>The first sign of a price upside for NAND flash did not sustain any momentum, and the latest July quotes for mainstream density chips reflect an average 10% sequential drop amid the rumored delay of the high-density iPod nano, according to industry observers. Hynix Semiconductor and Samsung Electronics are also said to be provoking a price war, industry sources indicated.

Although research firm Gartner Dataquest believes that the upcoming 10-12GB iPod nano, scheduled for launch in the fourth quarter of this year, will help to firm-up prices in the second half of 2006, with a 5.8% shortage in evidence in the fourth quarter, current price trends are still unclear, amid rumors that the iPod product will be delayed.

Sources at Phison Electronics, the leading memory-application controller-IC design house in Taiwan, echoed the sentiment and indicated that current consumption of NAND flash is conservative as a reult of the iPod nano rumor. The sources said that the market outlook will only become clearer when the negative news disappears.

Prices of mainstream NAND flash chips keep heading south since experiencing an initial upside in May, and the price decline had been enlarged to as much as 14.41% for the 1Gbit part, as of July 6, according to figures posted by DRAMeXchange.

SanDisk, which holds a dominant position in the NAND application market, is said to have proposed a price reduction for its finished goods, amid the general listlessness in pricing, according to industry sources. Meanwhile, sources at SanDisk’s distributor indicated there had been no news from SanDisk itself about a price adjustment.

Hynix and Samsung , who together accounted for over 60% of global NAND sales in the first quarter of 2006, as estimated by iSuppli, are said to be sparking a price war. Industry sources observe that Samsung is quoting its single-level cell (SLC) NAND at a level similar to that of multi-level cell (MLC) solutions, in an attempt to avoid losing customers and attract more orders.

Although Samsung proposed a price reduction in order to woo customers away from Hynix, industry sources observed that the effect is minimal, but NAND flash prices generally have been dampened.