NAND:Prices, Market Shares (Micron Up, Toshiba Down..)
| NAND flash market share in July 2011 |
Micron was able to increase its market share in NAND flash to 20.7% based on IHS report (see below)
"Micron was able to claim some of the market share ceded by Toshiba. The Japanese maker in the second quarter saw its share decline by 9.5 percentage points sequentially, which occurred after strong growth in the first quarter....
Micron accounted for 80 percent of production from its joint venture with Intel, up from 62 percent in the first quarter. The increase was part of a revised capacity agreement between the two companies."
The pie chart shows how much Micron's market share improved since July 2011. (via https://www.semiconportal.com/en/archive/news/main-news/110715-toshiba-fab5-nand.html).
Since July 2011, NAND prices have been trending down. From the second article below:
"over the last two or so years, Micron, Samsung, SK Hynix and Toshiba began to expand their NAND production at a dramatic pace. The goal was to meet the anticipated demand for the next wave of product drivers, such as smartphones, solid-state drives (SSDs), tablets and ultrabooks.
Seeking to drive down product costs, particularly for SSDs, NAND vendors took the lead in process technology. For example, the Toshiba-SanDisk duo has been ramping up parts based on the world’s most advanced process, a 19nm technology.
The bottom fell out of the NAND market in recent times. NAND vendors built up too much fab capacity. Average selling prices (ASPs) for NAND fell by 46% in the first half of 2012. Demand for NAND in smartphones and tablets remains overwhelming, but SSD and ultrabook shipments have been disappointing thus far."
Ron
In a First, U.S.-Based Micron Takes 20 Percent Share of the NAND Flash Market
Dee Nguyen, September 21, 2012
For the first time since it entered the industry seven years ago, U.S.-based Micron Technology Inc. managed to cross the 20 percent market share threshold in the NAND flash memory business during the second quarter.
Micron posted the strongest sequential performance of all NAND suppliers, with second-quarter revenue amounting to $897 million, up 6 percent from $846 million in the first quarter, according to an IHS iSuppli
In comparison, the other ranked suppliers all suffered revenue declines during the same period.
Despite overall NAND flash market revenue declining by 13 percent, Boise, Idaho-based Micron increased its market share to 20.7 percent in the second quarter, up from 17 percent in the first quarter, as presented in the table below.
“Defying weak demand and falling prices in the overall business, Micron expanded its NAND revenue and market share to reach the key 20 percent milestone for the first time since it started selling the memory in 2005,” said Dee Nguyen, memory analyst at IHS. “Micron not only successfully increased its bit shipments of NAND flash by a whopping 68 percent, it also benefitted from a reallocation in production from the NAND joint venture partner with Intel Corp., while capitalizing on the travails at its close competitor—No. 2-ranked Toshiba Corp.”
Intel and Toshiba Benefit Micron
In the second quarter, Micron accounted for 80 percent of production from its joint venture with Intel, up from 62 percent in the first quarter. The increase was part of a revised capacity agreement between the two companies.
Meanwhile, Micron was able to claim some of the market share ceded by Toshiba. The Japanese maker in the second quarter saw its share decline by 9.5 percentage points sequentially, which occurred after strong growth in the first quarter.
“Toshiba may be stuck in a repeat pattern of decline in one quarter that is then followed by growth and renewal during the following quarter,” Nguyen said. “Similar to what it experienced in the second quarter, Toshiba recorded poor results in the fourth quarter last year—and then promptly bounced back in the first quarter of 2012 as it cleared out stagnant inventory. Should Toshiba do the same in the third quarter and rebound during the end of the second half of 2012, Micron may see some of its market share gains dissipate.”
Ranking the NAND Suppliers
Micron in the second quarter remained in third place after No. 1-ranked Samsung Electronics of South Korea, with 42.5 percent; and No. 2 Toshiba, with 24.7 percent. SK Hynix Semiconductor of South Korea sat in fourth place, with 11.8 percent.
Like Micron, Samsung benefited from the Toshiba downslide: Samsung gained 5.1 percentage points in market share.
Price Erosion Diminishes Revenue Gains
Micron also put more distance between itself and SK Hynix, now separated by 8.9 percentage points compared to 5.9 percentage points in the first quarter.
Still, Micron’s wins during the period need to be qualified. Despite tremendous growth in its bit shipments, Micron posted a NAND revenue increase that was much smaller. NAND average selling prices in the trade had declined 39 percent in the second quarter compared to a 23 percent drop in the first quarter—mainly because of a shift in product mix toward multilevel cell (MLC) as well as a higher share of bits being shipped into channels other than the embedded market, resulting in lower ASPs.
Regardless of the pricing challenges, Micron’s graduation from the market-share teens to the 20’s shows that the company has proven to be a worthy long-term competitor in the NAND flash business. Micron should also be well-positioned for the next wave of demand, expected to come from solid state drives that utilize NAND flash in devices such as the ultrabook, IHS believes.
NAND Enters Tough Cycle
http://semimd.com/blog/2012/09/20/nand-enters-tough-cycle/
By Mark LaPedus
The NAND flash memory market is entering into a new and painful cycle, a period that will impact suppliers, OEMs and fab tool vendors alike.
For some time, there has been an oversupply and depressed pricing in the NAND market. In mid-2011, Micron, Samsung, SK Hynix and Toshiba put on the brakes in their capital spending plans. And in recent months, NAND suppliers in total have announced plans to cut 150,000 wafer starts per month, or about 12% of the world’s NAND capacity, amid ongoing losses and sluggish demand.
Just as suppliers moved to cut their production, spot shortages of NAND surfaced at some OEMs in early September. Most OEMs are not seeing any shortages, but that could all change. Apple, the world’s largest buyer of NAND, could cause some gyrations in the channels as it ramps up its new iPhone 5.
So what’s the outlook in the fluid and confusing NAND market? Amid a bitter legal battle with Samsung, speculation is rampant throughout the NAND industry about whether Apple will swap suppliers from Samsung to SK Hynix, Toshiba and Micron. If that happens, Samsung would face an oversupply in NAND, while others may see capacity shortfalls.
The outlook is also not so rosy for fab tool vendors, which counted on a big capital spending cycle for NAND. In fact, NAND suppliers are expected to push out their capital spending plans until June of 2013 and perhaps beyond, said Vijay Rakesh, an analyst with Sterne Agee.
The lack of capital spending is expected to create a shortfall in NAND capacity, creating perhaps a long cycle of acute shortages. Presently, there is a capacity glut for NAND. “Demand should catch up with capacity by mid-2013,” said Jim Handy, an analyst with Objective-Analysis. “Then, there could be NAND shortages from then until the middle of 2015.”
In total, suppliers are expected to ship 28.013 billion gigabits of NAND in 2012, which represents a bit growth of 49% over 2011, according to Stern Agee. The figure is lower than the historical averages in terms of bit growth, which ranges from 65% to 85%, according to the firm. In total, suppliers are expected to ship 43.756 billion gigabits of NAND in 2013, which represents a bit growth of 56%, according to Stern Agee.
Boom to bust
NAND has seen its share of boom and bust cycles. Several years ago, NAND vendors witnessed a meteoric rise amid a boom for cell phones, flash cards, USB drives and other products.
Then, over the last two or so years, Micron, Samsung, SK Hynix and Toshiba began to expand their NAND production at a dramatic pace. The goal was to meet the anticipated demand for the next wave of product drivers, such as smartphones, solid-state drives (SSDs), tablets and ultrabooks.
Seeking to drive down product costs, particularly for SSDs, NAND vendors took the lead in process technology. For example, the Toshiba-SanDisk duo has been ramping up parts based on the world’s most advanced process, a 19nm technology.
The bottom fell out of the NAND market in recent times. NAND vendors built up too much fab capacity. Average selling prices (ASPs) for NAND fell by 46% in the first half of 2012. Demand for NAND in smartphones and tablets remains overwhelming, but SSD and ultrabook shipments have been disappointing thus far.
“The adoption of solid-state drives is not ramping as quickly as forecast, and with only a modest increase in the bits per box for mobile devices, we now see NAND bit growth in the range of 60% to 65%,” said Mike Splinter, chairman and chief executive of Applied Materials, during a recent conference call. As a result, NAND vendors in total plan to cut production by roughly 150,000 wafer starts per month “on top of a reduction in their capital spending,” Splinter said.
Based on recent announcements, Toshiba is cutting 30% of its NAND production, Micron is reducing its output by 15%, and SK Hynix and Samsung are each at 10%, said Hans Mosesmann, an analyst with Raymond James. “Using these percentages, this would equate to a 12% reduction in supply,” he said.
NAND vendors expected bit growth of about 70% in 2012, but they have lowered their forecasts to about 45%, said Robert Witkow, president of Westwood Marketing, a research firm. “All manufacturers are regulating bit growth by slowing the transitions of 2xnm to the 1xnm node,” Witkow said. “All manufacturers are slowing their transitions from 64-Gbit to 128-Gbit devices.”
One OEM, OCZ Technology, lowered its quarterly forecast in September, saying it could not obtain enough NAND parts for its SSDs. “My price survey and other feedback I’ve received confirm some tightness (in NAND supply),” Witkow said. “If we have allocation in NAND, which I think is possible in 2012, it will be short-lived. I think the NAND market will ease at the end of October, as production sold for Christmas winds down.”
The average selling price (ASP) outlook is good for consumers, but horrific for suppliers. In September 2010, NAND crossed the $1.00/GB price point. The price dropped to $0.35/GB in May of 2012, according to Objective-Analysis’ Handy. “It hit $0.31/GB in June, but then it went back up to $0.36/GB in August,” Handy said. “The June pricing was below manufacturing costs, which is unsustainable. It could go as low as $0.31/GB again, but not temporarily as it did before. That would be permanent.”
NAND CapEx slows
On the fab tool side of the equation, Applied Materials and others saw a softening in demand for gear in the summer, due in part to sharp declines in foundry and NAND spending. By late August, tool vendors saw a further deterioration in NAND, causing more tool pushouts, according to Applied’s Splinter.
Capital spending will remain anemic in DRAMs. The foundries expanded their 28nm capacities earlier this year. But more recently, foundries put the brakes on spending to digest their new tool buys, Splinter said. In total, fab tool capital spending is expected to reach $30 billion to $33 billion in 2012, down 10% to 20% from 2011, he said. In its original projection, Applied forecasted a flat year in fab tool spending.
There’s good and bad news for fab tool vendors. For example, Samsung, the world’s largest NAND vendor, is cutting some NAND production. But the company also is converting some of its NAND production to system LSI and foundry services. As it turns out, logic is more profitable than NAND.
Samsung still wants to remain the leader in NAND. Last year, for example, the company began ramping up NAND production in Line 16 in Korea. “Samsung has slowed its expansion of Line 16, but it did not cut wafer starts,” said Westwood Marketing’s Witkow.
In Austin, Texas, Samsung has two 300mm fabs, plus a copper metallization facility. One fab is a foundry/logic plant. The fab, dubbed S2, is a foundry plant dedicated for Apple.
The other fab in Austin is currently a NAND facility. Austin represents about 20% of Samsung’s total NAND capacity, according to Barclays Capital. However, Samsung is converting that fab from NAND into a system LSI plant, said Christian Gregor Dieseldorff, an analyst with SEMI. “Ultimately, all of Austin will be converted to system LSI,” Dieseldorff said.
In Korea, Samsung’s main logic/foundry fab is called S1, which is being expanded. Samsung is converting its Line 14 plant in Korea from NAND to 28nm logic capacity. Line 14 is now part of S1, he said.
Meanwhile, Toshiba, the world’s second largest NAND vendor, in June announced plans to cut NAND production by about 30% at its Yokkaichi Operation fab in Mie Prefecture, Japan. At a minimum, this could remove 6% of worldwide NAND supply, according to Barclays Capital.
Micron, the world’s third largest NAND vendor, is re-balancing its capacity. “Micron increased its triple-level-cell (TLC) wafer production slightly, but reduced its multi-level-cell (MLC) slightly in June. My belief is that the move was taken to support the Lexar consumer product builds for Christmas. Micron will likely shift (its production) back to MLC shortly,” said Westwood Marketing’s Witkow.
SK Hynix, the world’s fourth largest NAND vendor, added 10,000 wafer starts at its new M12 fab in Korea. But SK Hynix is also mulling plans to shift its capacity from NAND to DRAM in M12, according to Barclays Capital
copyright 2012 Ron Maltiel all rights reserved
