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NOR, DRAM up in Q2, reports iSuppli

Posted: 17 Aug 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Hynix Semiconductor? Samsung? Toshiba? NAND? NOR?

NAND flash memory posted a tough second quarter, while the NOR flash and DRAM segments showed strength, said iSuppli Corp. The market research firm said it is considering trimming its NAND sales growth forecast for the year.

Calling it a case of "role reversal" in chip memory, iSuppli said Q2 NAND sales slipped 15.7 percent, while NOR and DRAM sales increased 6 and 16 percent, respectively.

Citing a 33 percent in average selling prices (ASPs) during the quarter, iSuppli said NAND sales declined to $2.7 billion from $3.24 billion. The firm noted that it had predicted NAND ASPs would fall by 20 percent, but that they actual slippage exceeded its expectations.

iSuppli's report provides more evidence of tough times for the once high-flying NAND segment. Last week, a report by Gartner Inc. said that, for the week ended Aug. 4, spot prices for NAND flash-memories "showed the steepest decline during the past eight consecutive weeks of downward pricing." NAND spot prices fell by an average of 12 cents during the week, Gartner said, hitting $2.17 on a 1Gbit equivalent basis.

NAND megabyte unit shipments were in line with iSuppli's forecast, the firm said, but at a 25 percent increase, they didn't rise enough to offset the decline in ASPs. The overall per-megabyte ASP for NAND appears to be on track for a nearly 60 percent decrease for all of 2006, exceeding iSuppli's previous forecast of a 53 percent decline for the year, the firm said.

"NAND ASP declines were due to a flood of supply on the market, as manufacturers ratcheted up production faster than demand grew," said Nam Hyung Kim, director and principal analyst for iSuppli. "On the other hand, the major increases in production allowed NAND flash revenue in the second quarter to increase by a healthy 21 percent compared to the same period in 2005so not all the news was bad for the NAND market."

Hynix Semiconductor Inc. was the only company to achieve sequential growth in NAND sales during the second quarter, iSuppli said, increasing 5 percent to $505 million. Hynix increased its market share to 18.5 percent, up from 14.8 percent in the first quarter, iSuppli said.

Samsung Electronics Co. Ltd. and Toshiba Corp. remained the top two suppliers with 46.4 percent and 24.7 percent market share respectively, according to the firm.

iSuppli acknowledged that it is considering trimming its lofty prediction for 2006 NAND sales growth from 37 percent to the 15 to 20 percent range.

"iSuppli also may cut its 2007 market forecast due to uncertain demand and intensifying competition ahead," Kim said.

Demand drivers are continuing to evolve in the NAND market, according to iSuppli. MP3 players drove shipments in 2005 and portable media players and mobile phones are propelling sales this year, the firm said. The next big demand driver for NAND, solid state drives in computers, is expected to emerge in 2008, rather than in 2007, iSuppli said.

With no new killer application expected in 2007, sales growth will be lower than previously expected next year, Kim warned. The uncertain global economy, tightening customer budgets, rising energy prices and increases in interest rates are all risk factors for the consumer-oriented NAND market, iSuppli said.

iSuppli said it is nevertheless maintaining its "neutral" rating the near-term NAND market conditions, saying the firm still believes that market conditions will improve in the fourth quarter.

- Dylan McGrath
EE Times

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