NAND suppliers are continuing to cut production after a Q2 decline in spot prices which has led to a Q3 decline in contract pricing, says DRAMeXchange.

Although, between April and June, suppliers managed to keep contract prices stable by cutting production, in June and July there was a fall in demand as the market for cloud services fell.

The Q3 market is estimated to be 2.6% over-supplied and a 10% decline in contract prices is expected.

The Q4 market is estimated to be 7.8% over-supplied  which is expected to produce a sharper decline in NAND prices exacerbated by a rise in the yields on 128-layer memories.

Yangtze Memory is still pushing ahead with capacity expansion, currently shipping 64-layer devices and planning to start volume production of 128-layer devices in Q3.

It will be selling into a weakening market. It is possible that suppliers could weaken the market further by turning up production in order to minimise Yangtze’s returns.