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The Shifting Landscape of
Inventory, Production, and Demand of NAND and DRAM
1.
Chip sales start growing again -
EE Times
2. Samsung and Apple in talks about NAND flash purchase
for iPods and iPhones (volume requested by Apple
is 10-15% more than what was agreed earlier )
-
DigiTimes.com
3. SanDisk: Price reduction to persist in 2Q
(Transition from the single-level cell (SLC) to the MLC production
resulted in an influx of MLC's NAND flash architecture)
-
DigiTimes.com
4. Preliminary DRAM market share in first Quarter 2007- Hynix gains on
Samsung, from iSuppli -
EE Times and
DigiTimes.com
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1. Chip sales start growing
again
John Walko
(04/30/2007 7:07 AM EDT)
URL: http://www.eetimes.com/showArticle.jhtml?articleID=199202450
LONDON — Worldwide sales of semiconductors increased by one percent in
March to $20.3 billion compared with the previous month, and are 3.2
percent better than the $19.7 billion reported for March 2006, according
to the the Semiconductor Industry Association (SIA).
The increase reverses three months of sequential declines recorded by
the SIA (San Jose, Calif.).
The organization says price pressures resulting from intense
competition in major market segments such as DRAMs, DSPs and NAND flash
limited industry growth despite higher unit shipments for these products
in March.
DRAM sales declined by just over 8 percent from the last quarter of
2006, reflecting strong pricing pressure as units increased over 16
percent while average sales prices dipped close to 20 percent over the
same time period.
Microprocessor revenues declined by nearly 13 percent from the prior
quarter, reflecting a decline in unit sales while average sales prices
remained almost unchanged.
First-quarter global chip sales reached $61.0 billion, a 3.2 percent
increase from the $59.1 billion reported for the first quarter of 2006.
Sales declined by 6.5 percent in the first quarter of 2007 compared to
the $65.2 billion reported for the final quarter of 2006.
"Even with continued strength in unit sales of personal computers,
mobile phones, and other portable consumer electronic products, an
abundant supply of chips for these applications resulted in declining
average selling prices as manufacturers sought to hold onto market
share," commented George Scalise, SIA president.
"The competitive pressures we have seen in the semiconductor industry
over the past few months have led to record low prices for PCs — the
average sales price for a consumer PC fell to $850 in the first
quarter," Scalise added.
Sales for the year so far are running slightly ahead of last year's
record level, but well short of the 10 percent growth projected in the
forecast issued by SIA last November. "Semiconductor sales are
increasingly tied to worldwide economic performance and consumer
confidence," Scalise said.
The SIA plans to provide an updated industry forecast on June 13.
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2. Samsung and Apple in
talks about NAND flash purchase
Josephine Lien, Taipei; Carrie Yu, DIGITIMES
[Thursday 26 April 2007]
Samsung Electronics and Apple have been in talks recently at Samsung's
headquarters in South Korea for the purchase of a volume of NAND flash,
with the chips to be purchased covering those to be used in all iPods
and iPhones from June to year-end 2007, according to sources.
Apple is asking for 400-500 million 4Gbit NAND flash equivalent chips
from Samsung, the sources said. Since the volume requested by Apple is
10-15% more than what the two parties agreed earlier, Samsung is not
100% sure its capacity can meet the need, the sources indicated.
Moreover, the maker is worried an oversupply for NAND flash chips may
occur if the sales of Apple's iPod and iPhone products are not as strong
as expected, the sources added.
The sources also indicated Apple has requested that Hynix Semiconductor
increases its supply of NAND flash for the third quarter while Hynix
also has barely enough capacity to meet Apple's needs.
Samsung, Hynix, Micron Technology and Toshiba are major players for NAND
flash chips, with Samsung remaining the top player with a share of over
half the industry.
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3.SanDisk: Price reduction to persist in 2Q;
56nm mass production on way
Esther Lam, DIGITIMES, Taipei
[Friday 27 April 2007]
Excess supply and sharp price declines dampened
the performance of SanDisk, prompting it to take price actions
in the second quarter to narrow the price gap with competitors.
Although seeing market equilibrium disruption, SanDisk remains
confident about its cost structure by highlighting the ongoing
progress it will make on 56nm NAND flash production.
In the first quarter of 2007, the NAND flash
industry experienced excess supply, especially for multi-level
cell (MLC) NAND flash, sharp price declines and depressed
margins, which resulted in a quarterly loss of US$575,000 for
SanDisk, as opposed to a net income of US$35.1 million a year
ago. Gross margins in the first quarter was 14.2%, compared to
28.4% last year. Despite seeing average retail card capacity
jump by 87% on year and 11% on quarter to 1231MB, average price
per megabyte sold declined 62% on an on-year basis and 23% on an
on-quarter basis.
Commenting on the main reason for the market
equilibrium in the first quarter, company chairman and chief
executive officer (CEO) Eli Harari noted that the transit by
chipmakers from single-level cell (SLC) to MLC production
resulted in an influx of the later type of NAND flash
architecture. However, Harari noted that price correction amid
the imbalance should be complete and he believes SLC and MLC
NAND, which used to have a 10% premium, are now priced
correctly. For SanDisk itself, about 98-99% of its NAND flash
adopted are of MLC structure.
Though MLC prices have corrected, residual effects
remain, Harari said. As there still is a considerable amount of
low-price MLC NAND flash being sold in the market, prices are
being affected. Once the inventory clears, a more moderate
pricing environment should be seen, Harari stressed.
Continuous adjustments in price have to be made in
the second quarter despite the anticipated improving pricing
situation, as market share is important for SanDisk, Harari
said. Although the company carried out aggressive price
reduction in the first quarter, the price cuts still tailed
behind competitors, who made even sharper price adjustments,
Harari said. This resulted in a small loss of market share for
SanDisk in the US retail market, he added.
In response to the price pressure, SanDisk is
gearing up its pace on 56nm NAND flash production. The company
has already ramped up volume production of MLC NAND flash at Fab
3 on 56nm. Higher density, including 8Gb and 16Gb chips, will be
introduced for 56nm production at the fab. Harari believes that
these density of chips will become the majority of bits shipped
in the fourth quarter.
Fab 3 is expected to ramp up to a monthly capacity
of 150,000 wafers per month by year-end of 2007, which beats the
original plan of 135,000 wafers, Harari detailed. Fab 4 is also
on the way to contribute to sales with actual sales contribution
expected to be seen in the first half of 2008, he added. Besides
ramping up 56nm NAND proportion, SanDisk also plans to start
45nm NAND flash in the first half of 2008. |
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