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Shortage looms in memory market

Posted: 17 Feb 2010 ?? ?Print Version ?Bookmark and Share

Keywords:memory shortage? NAND? DRAM?

There is expected to be a tight supply of memory parts in 2010 and perhaps beyond due to rebound in memory demand; lack or under-investment of capital spending in the sector in previous years; and extended lead times for lithography gear from ASML Holding NV.

"Following extensive checks across the memory food chain, we continue to expect the current tightness in memory supply to persist through CY10 and much of 2011," said Tim Luke, an analyst with Barclays Capital Inc., in a recent report.

NAND bit growth is expected to jump 70 percent in 2010, compared to 41 percent growth in 2009; DRAM bit growth is expected to hit 52 percent in 2010, according to the report.

"This reflects the effects of the significant reductions in capex in the years 2008 and 2009 which were down 40 percent and 60 percent, respectively, being coupled with some steady increases in demand levels for both DRAM and NAND," Luke said.

Memory capital spending may grow 105 percent to $17.4 billion in 2010, but there are still some issues. "While memory demand has shown some improvement, the limited supply and availability of the latest immersion lithography equipment required for node transition to smaller geometries has been a major gating factor," Luke said. "Industry checks suggest that it may not be until the end of Q3 10 that more equipment for ASML becomes available to lift supply with further installation and testing processes likely to keep supply tight into Q4 10."

ASML and Nikon Corp. are the major suppliers of lithography equipment. ASML is the dominate supplier in the memory and foundry segments. ASML's latest tool is the NXT. Nikon is the main supplier to Intel Corp.

"ASML currently has roughly 9 months lead times on the NXT as it is in the process of reducing the cycle/production time for the tool. This limits the level of shipments of immersion tools to 14 and 22 in Q1 10 and Q2 10 according to our estimates. As the production process matures, we forecast 23 and 29 immersion units in Q3 10 and Q4 10," he said.

South Korea's Samsung Electronics Co. Ltd could boost its capital spending amid the IC recovery. In the process, Samsung is also procuring a slew of 193nm scanners from ASML. In fact, the chipmaker is hogging the supply chain for ASML systems, said C.J. Muse, an analyst with Barclays Capital, in a separate report.

- Mark LaPedus
EE Times

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