Contract prices for NAND flash memory fell 3-5% in the first half of January, as demand has not been strong enough to digest the industry's capacity, DRAMeXchange reported. DRAMeXchange estimated that shipments of OEM devices, such as smartphones, tablets and notebooks, are set to decrease 15-20% sequentially in the first quarter of 2014. Bracing for reduced orders from OEMs, NAND chip suppliers are looking to increase shipments to memory module firms, causing chip prices to trend downwards, DRAMeXchange said.

However, many module firms are cautious due to the high inventories they currently hold, DRAMeXchange added. Contract prices for NAND flash chips will continue to drop at a moderate pace in the second half of January.

NAND flash contract prices may see a larger decline later this year, as seasonal factors will negatively affect sales of memory cards and drives, eMMC and SSD devices, DRAMeXchange said. The gap between supply and demand will widen to about 4-5% later in the first quarter of 2014.