An anticipated rally in NAND flash memory prices during the third quarter may be short-lived, according to CK Chang, president for memory module firm Apacer Technology.

A pick-up in demand for smartphones is expected to help digest NAND chipmakers' excess stock in the third quarter, said Chang. Nevertheless, the memory price outlook for the third quarter really depends on how much prices have fallen in the second quarter, Chang indicated.

NAND flash prices will rebound in the third quarter if prices "fall extremely" in the second quarter, Chang noted. Otherwise, NAND flash prices should register only flat growth sequentially in the third quarter, Chang said.

The NAND flash market is already in oversupply, Chang indicated. He also noted that substandard NAND flash chips have recently been released to the channel causing the memory prices to fall further. Major chipmakers already introduced their 3D NAND production processes, but the process manufacturing yield rates have not been raised as fast as they should be causing a build-up of substandard chip stocks.

As chip firms improve gradually their 3D NAND production yield rates, Chang continued, he agreed with the market consensus that NAND flash prices will trend downward in the long term. Chang believes that NAND flash prices will fall to as low as US$0.20 per Gb when 3D NAND production becomes mature, Chang said.

If NAND flash prices reach US$0.20 per Gb before chipmakers' 3D NAND processes reach their mature yields, the prices will have fallen "too much," Chang indicated.

On the other hand, DRAM memory prices will rally through the third quarter, Chang noted. Datacenter servers will play a major driver of DRAM demand growth in 2018, Chang said.

Despite the mixed outlook for the third quarter, both NAND flash and DRAM memory prices will trend downward again starting November, according to Chang.