Ron@Maltiel-consulting.com -  Semiconductor & Patent Expert Consulting

 Litigation expert consultant and patent expert witness for process, device, and circuit of  Dynamic

 Ram (DRAM), Flash  (NAND, NOR, EEPROM), and Static Ram (SRAM) Memories,

 and Microprocessor, Logic, and Analog Devices.

NOR Shortage Could Be Coming, iSuppli Warns Staff Reporter -- 5/25/2006

Seasonality hit the NOR flash memory in Q1, with all of the top three companies in the space loosing ground on a sequential basis. That and other industry factors have iSuppli cautioning that shortages of NOR products could materialize in 2006.

According to a report from iSuppli Corp. this week, Spansion LLC held its position as the world's leading supplier of NOR-type flash memory with sales of $562 million, down 6.5 percent quarter-over-quarter. Intel Corp. stayed in second place with revenue of $537 million, down 10.5 percent from Q4 2005. And Europe's STMicroelectronics remained in third place with revenue of $327 million, a 2.4 percent decline the previous quarter.

"Revenue for each of the top-three NOR suppliers was lower in the first quarter than it was in the fourth. However, this was not unexpected because it reflects normal seasonal sales patterns in the NOR market," said Mark DeVoss senior analyst, flash /SRAM/MCP for iSuppli, in a statement.

Despite the seasonal decline, some NOR suppliers managed to achieve sequential revenue growth in the first quarter of 2006. The firm noted Micron Technology, which sold $43 million worth of NOR in Q1, was up 23 percent from Q4. Samsung Electronics also achieved growth, according to iSuppli’s data, and recorded its best-ever quarter for NOR flash sales, with revenue of $125 million, up 9 percent Q4.

Even with the companies beating the seasonal odds, iSuppli cautioned the NOR market. The firm noted that the revenue declines experienced in the NOR market in 2004 and 2005 precluded any major investment by the main suppliers in new NOR flash manufacturing capacity during those years. Instead, the NOR suppliers focused on migrating to finer pitch lithography, increasing their production of two-bit-per-cell flash technologies and entering into foundry support agreements for producing legacy technology products. iSuppli believes that while these moves are not insignificant, they may prove to be inadequate in the face of the increasing demand for flash memory for mobile phones and other electronic devices. Because of this, shortages of NOR products could materialize in 2006, the firm concluded.

PRELIMINARY Q1 2006 TOP-10 NOR FLASH MEMORY MARKET SHARE
ranking by revenue in millions of U.S. dollars*

Q4 '05 Rank	Q1 '06 Rank	Company Name	Q1 '06 Revenue	Q1 '06 Percent Market Share	Q1 '06 Percent Change from Q4 '05	Q1 '06 Percent Change from Q1 '05
1	1	Spansion	$562	27.9%	-6.5%	22.2%
2	2	Intel	$537	26.7%	-10.5%	-7.1%
3	3	ST Microelectronics	$327	16.2%	-2.4%	38.6%
4	4	Samsung	$125	6.2%	9.6%	4.2%
5	5	Silicon Storage Technology	$80	4.0%	-20.8%	17.6%
6	5	Sharp Electronics	$80	4.0%	-5.9%	-17.5%
7	7	Toshiba	$71	3.5%	-2.7%	-22.8%
8	8	Macronix International	$47	2.3%	-19.0%	4.4%
11	9	Micron Technology	$43	2.1%	22.9%	43.3%
9	10	Atmel	$39	1.9%	-7.1%	30.0%
		Others	$102	5.1%	-	-
		Total NOR Revenue	$2,013	100%	-6.4%	6.1%

*Including revenue from multichip packages (MCPs) (SRAM/PSRAM/MDRAM/MCU/Logic)
SOURCE: ISUPPLI CORP., MAY 2006