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Toshiba's NAND flash cuts increases market morale

Posted: 26 Jul 2012 ?? ?Print Version ?Bookmark and Share

Keywords:NAND flash? Eurozone debt crisis? Yokkaichi fab? ultrabooks?

With the lingering effects of the Eurozone debt crisis in the second half of 2012, NAND flash industry vendors are concerned that the traditional peak sales season for consumer electronics will be weaker than usual.

According to TrendForce's DRAMeXchange, memory card and universal flash drive markets are seeing sluggish demand. This sluggish demand also coincides with the fact that the releases of certain hardware and software components have been delayed. As a result, new models of some NAND flash application products, such as smartphones, tablet PCs and ultrabooks, will not be available until late August to early November.

DRAMeXchange

Figure 1: 1Q12 Sales Ranking of Branded NAND Flash Makers.
Note 1: 4Q11 USD/JPY=1:77.3; USD/KRW=1:1,144
Note 2: 1Q12 USD/JPY=1:79.4; USD/KRW=1:1,130
Note 3: Toshiba sales figure includes MCP (multi-chip-package) products
Source: DRAMeXchange, May 2012

The NAND flash market will also continue to experience oversupply in the third quarter. As NAND flash suppliers experienced significant profit cannibalization due to the continuous decline of NAND flash price in the first quarter of 2012, manufacturers are planning to slow output growth in the second half of the year to reduce the NAND flash market supply-demand gap.These bleak market conditions have forced to Toshiba to cut capacity by approximately 30 percent at its Yokkaichi fab, in hopes of helping the market achieve balanced supply and demand before the arrival of the fourth quarter peak season. TrendForce expects Toshiba's temporary capacity reduction will benefit the oversupply situation in the third quarter as well as rally NAND flash industry confidence needed to help stabilize market price. However, as the majority of vendors are still uncertain toward fourth quarter sales, the price trend will still depend on actual market demand as well as other suppliers' capacity adjustment plans.

According to TrendForce data, in the first quarter of 2012 Samsung led the NAND flash industry with 33.9% market share, while Toshiba was in a close second with 32.9% of the market.

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