Bank of America latest report on Mu today, conclusion said:
Inadequate Capital Investments and Availability of Equipment
In Micron’s estimation, the world’s memory suppliers are significantly underinvesting in new
production capacity relative to oncoming customer demand. Leading DRAM competitors such as
Samsung and Hyundai are thought to be increasing DRAM bit output respectively by no more than 60% and 50% in 2001 Vs 2000 compared with projected demand of at least 80%. While Micron looks able to increase grow DRAM bits by at least 100% next year Vs this, and will increase its already leading market share accordingly, they believe they will not be able to meet customer demand even in the upcoming seasonally weak post-holiday period.
Their opinion is that the semiconductor capital equipment industry is unable to meet industry requirements for the foreseeable future.
Ongoing Tight Market Conditions
In conclusion, owing to higher than expected demand and slower than anticipated supply growth over the past several years, with the lag time between commencing capacity additions and bringing them fully on lengthening, with process transitions slowing throughout the semiconductor industry and with few willing to venture rapidly into 300mm (12") wafer processing, all flavors of semiconductor memory will tighten before loosening. Furthermore, burgeoning demand growth is continuing into late 2000 and promises to further do so in 2001, such that industry-wide shortages could prevail well into 2002. Prices are rising across the memory mix and within each major category, such that decisions to allocate capacity from one area to another (e.g. DRAM to Flash, low power SRAM to high speed SRAM) only increases the shortfall in the others. Such ROLLING SHORTAGES can be expected until new generation fabs ramp in the 2002-2003 time frame.
Tightening Memory Supply
In Micron management’s opinion, memory supply - to include DRAM, SRAM and Flash - has significantly tightened over the past two months. Customer roadmaps of increased bits per box, whether in PCs, server, network switches, cell phones, base stations, settop boxes or digital cameras, indicates to Micron that memory will remain in short supply for at least the next two years, possibly longer. |
