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Where did memory vendors go wrong?

Posted: 08 Apr 2009 ?? ?Print Version ?Bookmark and Share

Keywords:memory market? Numonyx CEO? flash memory?

We all know that the memory market is terrible. That's nothing new. But how did we get into this mess? Where did suppliers go wrong?

In an event at the Embedded Systems Conference (ESC), Brian Harrison, president and CEO of flash memory specialist Numonyx Inc., said memory makers have made four major mistakes during the current and bad cycle.

1. Over investmentCapital spending jumps during boom cycles, causing a glut during downturns. Another cause is "government subsidies, which affects supply and demand," Harrison said during a keynote at ESC this week.

Hariison did not give names, but Germany's Qimonda AG attempted to garner a government bailout. That failed and it is now going under. Meanwhile, some Taiwan DRAM makers are looking for a bailout. The island has formed a government-backed venture, dubbed Taiwan Memory Co., to absorb failed entities. But will it work? It's unclear, but the overall supply/demand picture remains bad in memories.

2. UncommittedMemory players, including the big vendors, tend to chase after "smaller niches" during the bad times. According to Harrision, when the market turns, the big players "exit" that market, leaving customers in a lurch.

This mistake was exhibited by Spansion Inc., which exited the 5V embedded flash market, creating panic among automotive customers. Then, Numonyx has responded by re-entering that market.

3. UnresponsiveThe big players tend to ignore the low-mix markets and look for high-volume sectors, Harrison said.

This reaction leaves customers hanging and unable garner a source of supply.

4. UninventiveThe big players tend to "move ahead" with leading-edge technology, "leaving (trailing-edge) technology behind," Harrison said. The smaller players can't keep up and devise "me too" solutions, he added. "Me-too" products, then create a capacity glut in these bad times

- Mark LaPedus
EE Times

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