After witnessing NAND flash ASPs plummet in 2006, SanDisk predicts another 50% drop in 2007. Given the anticipation of demand from a wide range of consumer electronics applications, the US-based leading memory application supplier, remains bullish about overall demand despite the anticipated ASP drop.
SanDisk said per MB consumption will be encouraged along with the ASP drop and the company should see growth in gross margins. However, the company also warned that if the current supply and demand situation persists, severe ASP drop pressure will emerge and any ASP drop exceeding 60% on a yearly basis will dampen the company's gross margins, though further boosting per MB consumption.
While observing a pile up of some NAND flash-based components from December that brought a stiff price decline recently, SanDisk said some chipmakers are also building up their multi-level cell (MLC) NAND flash capacity at a faster pace than demand growth in the first quarter of 2007, indicating stronger price pressure will come.