NAND production capacity is expected to be further reduced in Q4 as manufacturers seek to stabilize pricing. Previous capacity reductions by the top suppliers will be felt in the year's second half. Nevertheless, additional contractions are anticipated on slower inventory depletion. For all memory devices, inventories through H1 were 37% higher year-on-year, and demand activities were down 21%. Spot market pricing for NAND flash wafers is rising because of recently increased wafer prices – meaning suppliers will be less flexible. Commodity and category teams should monitor spot NAND wafer and related NAND product spot pricing to determine if the upward trend will continue.