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iSuppli keeps 'neutral' rating on NAND market

Posted: 19 Jul 2006 ?? ?Print Version ?Bookmark and Share

Keywords:NAND flash? DRAM? NAND? iSuppli? XX?

Market research house iSuppli Corp. upgraded its rating for the DRAM market, but remains "neutral" and cautious about NAND flash.

"iSuppli is maintaining the 'neutral' rating on the NAND market it has held since June, until demand from the new MP3 and personal media player (PMP) products materializes," according to the research firm. "Until this demand arises, caution is the watchword for the NAND market."

There are reports that Apple Computer Inc. may delay the launch of its next-generation iPod nano, which "has depressed NAND spot prices in recent times," said iSuppli. However, Sony Corp. is expected to introduce a flash-based PMP, as well as its PlayStation Portable 2, which will have as much as 8-to-10Gbytes of NAND per system, according to the research firm.

"Assuming that Apple and Sony successfully introduce their planned products, 41 percent of global NAND supply will be consumed by the two companies in the fourth quarter," iSuppli estimates. "Any potential delay in new product launches from these two companies will blow away the supply/demand balance in the NAND market, and will spur significant oversupply and price declines."

Following improved market conditions, the firm upgraded the DRAM sector to "neutral," up from the "negative" rating it has maintained since April. Contract pricing for double-data-rate-2 (DDR2) SDRAMs in July dropped marginally, and now stands at slightly less than $40, according to iSuppli.

With the back-to-school purchasing season for PC OEMs having begun, demand for DDR2 is on the rise. "DRAM market fundamentals now are very sound, with supply and demand in a state of balance," said Nam Hyung Kim, director and principal analyst for iSuppli, in a statement.

"Market conditions will improve again in August after Intel Corp. and Advanced Micro Devices Inc. (AMD) reduce pricing for their PC microprocessors in late July," Kim added. "This will increase available budgets in PCs for memory, boosting DDR2 demand."

Looking further into the future, the arrival of Microsoft Corp.'s new Vista OS, expected to be introduced in Q1 2007, and AMD's adoption of DDR2 as a memory for its microprocessors, will further increase DDR2 demand.

- Mark LaPedus
EE Times

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