Sam:
Flash-memory shortage deepens
By EBN Staff
Electronic Buyers' News
(07/30/99, 06:59:15 PM EDT)
The flash memory shortage is growing far worse than
observers predicted six months ago, according to several
industry executives, who warned last week that the situation
could persist for another three years.
Several vendors, including Advanced Micro Devices Inc. and
Atmel Corp., last week emphasized the scarcity of
flash-memory chips, especially high-density parts, at
separate company presentations made at the BancBoston
Robertson Stephens Semiconductor Conference here. Citing
strong demand from set-top box and cellular phone makers,
Atmel is “booked out” [of high-density devices] for the rest
of the year, said B. Jeffrey Katz, vice president of marketing at Atmel.
In fact, suppliers are quoting distributors lead times of
between 18 and 20-plus weeks, said Jan Salsgiver,
president of Arrow Electronics Inc.'s North American
Components Operation.
“I think you'll find that Atmel is not the only one who's sold
out,” said Alan Niebel, analyst for Semico Research Corp.,
Phoenix. “Demand is hot. Granted, pricing is not going up
across the board, but for most densities there are certain
devices for which prices are increasing.”
According to NECX, AMD's 8-Mbit TSOP product, for
example, was priced at a $3.35 low in the open market in
early May. By June 25, the price had risen to $5.50, and by
July 23, $5.87.
“If you look at [non-AMD] 8-meg products, you'll see they
are starting to level off,” said Frank Cavallaro, director of
worldwide sales for NECX's Exchange. “Intel's for example
was on a sharp incline and has in recent weeks started to
stabilize, and other comparable parts have also shown
pricing stability.”
Even though customers are starting to see some relief in
prices, there's little left to buy. “Most everybody is sold out
of Q3 and many are selling out of Q4-both NOR and NAND,”
Niebel said.
“Going by fabs being put in place now, the industry is going
to be hard pressed to meet demand,” said Ben Anixter, vice
president of external affairs at AMD, Sunnyvale, Calif.
Anixter told investors last week that the company predicts a
two-to-three-year shortage, despite chip makers' efforts to
ramp production and increase capacity. In addition, vendors
underestimated demand for flash-memory chips; orders from
cellular-phone makers alone outstripped industry estimates
by between 50% and 100%, Anixter said.
With that kind of momentum, worldwide flash-memory chip
revenue is expected to reach $9 billion in 2003 compared
with $2.9 billion this year, according to AMD's estimates.
“Demand is accelerating in the areas of cell phones, PCs,
hard drives, and network applications, and the new one is
MP3, which is taking the NAND-flash market by storm,”
Niebel said.
Following a similar move by Fujitsu Ltd., Toshiba America
Electronic Components Inc. (TAEC) is shifting production
capacity from DRAM in favor of 128- and 256-Mbit
NAND-based flash chips. Toshiba plans to boost the
non-DRAM ratio of its memory products, including NAND, to
50% of memory output, from 35% today.
“We are positioning NAND flash devices as one of our core
memory products, in addition to DRAM, in response to
increasing demand for NAND flash products,” said Bob
Brown, president and chief operating officer of TAEC, Irvine,
Calif.
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