Gotta love news like this......
Prices firm, supplies tighten for NAND flash chips
by Jack Robertson, EETimes
Semiconductor Business News
08/04/2003, 1:23 PM ET
WASHINGTON, D.C. -- After a precipitous drop in the first half of the year, NAND flash prices have stabilized and for lower densities have even started to rise.
Vendors cited sharply higher demand for NAND flash in digital cameras, smart cell phones and applications ranging from secure smart cards to USB-enabled disk players. Toshiba Corp. attributed some of the supply squeeze in its initial phase to lower yields during a shift to 0.12-micron processing but says that's no longer a problem.
Analysts said growing demand has caused the two main NAND producers, Toshiba and market leader Samsung Electronics Co. Ltd., to call off a price war waged throughout much of the year as the suppliers fought for market share. With increasing demand, "the companies no longer feel they have to battle on price," said Allen Leibovitch, an analyst with IDC (Mountain View, Calif.).
A steep price cut for flash cards by SanDisk Corp. also caused chip suppliers to slash their NAND price tags at the start of the year.
"In the first quarter we saw new, lower prices almost every day. Now prices have leveled off as supply has gotten much tighter," said Chuck Schouw, president of M-Systems Inc. (Newark, Calif.), a subsidiary of Israeli flash card maker M-Systems Flash Disk Pioneers. "Lead times on deliveries are now stretching out, in some cases to three months. Earlier this year, customers were able to get off-the-shelf delivery."
The price of 64-, 128- and 256-Mbit NAND chips plunged by one-third from the third quarter of 2002 to the second quarter of this year, according to Semico Research Corp. (Phoenix). Tags for 256-Mbit and 1-Gbit chips plummeted by nearly half over the same period, although vendors said some of the decline reflected increasing volumes as production ramped up. The prices for 64- and 128-Mbit devices have since begun bouncing back, while higher-density NAND average selling prices are no longer falling.
Jim Handy, nonvolatile-memory analyst at Semico, said the tighter supplies, "are a product mix issue, as manufacturers transition more production from lower- to higher-density NAND chips. When the three suppliers Samsung, Toshiba and Renesas Technology Corp. switch production at the same time, it can create problems" for lower-density-chip supplies.
NAND customers grew accustomed in the past year to dictating lower prices in an oversupplied market, said Alan Niebel, an analyst with Web-Feet Research Inc. (Monterey, Calif.). "Now, with prices firming up, buyers suddenly have to start catering to manufacturers, especially on delivery schedules."
Indeed, Renesas, which produces a version of NAND known as AND flash, expects mushrooming demand will outstrip supply for most of the second half.
"Many customers are now concerned enough to start booking orders up to several months in advance," said Tad Keeley, Renesas' senior memory-products-marketing manager.
Toshiba said the growing NAND shortage is forcing it to resort to "shipping plans," the term the company uses in place of allocation. Scott Nelson, business development manager for memory products, said Toshiba has stretched average NAND deliveries into the fourth quarter.
At Samsung, Steffen Hellmold, director of flash marketing, claimed spiraling demand has caused a NAND shortage of 15 percent to 20 percent over available supply. "The supply situation is especially acute for 512-Mbit and 1-Gbit flash," Hellmold said. "We are having to put some customers on allocation for some densities."
NAND vendors claimed they are increasing production to meet demand. Renesas has staged a mid- to high-double-digit increase in AND flash production between the first and second quarters and will expand AND production at its 300-mm fab in Japan, Keeley said.
Samsung has kept to its historical trend of doubling year-over-year per-bit NAND production rates each quarter, Hellmold said. It also plans to build NAND flash at a 300-mm fab, he said. |
