Either we are going to be very right about how the NAND flash market is going to play out....or we are going to be painfully wrong. I dont think that even the analysts with sell ratings are counting on a 60-70% decline in pricing next year.
Message 20632262
'Gunfight at the OK Corral' and shakeout expected in flash-memory market
By Mark LaPedus
Silicon Strategies
10/12/2004, 1:09 PM ET
SAN JOSE, Calif. — Not long ago, there were serious product shortages and stunning growth in the booming flash-memory market.
Now, the business is turning into a "gunfight" in the tradition of the old Wild West. Average selling prices (ASPs) for products are projected to decline by up to 70 percent over the next year, said Jim Cantore, president of JLC Associates Inc. (San Jose), a market research and consulting firm.
And the flash market — which boasts a total of 11 or so suppliers #&151 is also ripe for a major shakeout, Cantore said. "Does the market need that many suppliers?" he said. "I see a shakeout at the high density market."
The analyst also projected a "two-year slump" in flash memories, due to a decline in digital camera shipments and flat growth for cellular phones. Compounding the price pressures are a new set of competitors that are entering the fray, including Hynix, Infineon, STMicroelectronics, among others.
"What I see in the market is a 'Gunfight at the OK Corral' for the next two years," he said, referring to the famous Western gunfight in Tombstone, Ariz. back in 1881.
"The number of flash units will go up," he said, "but ASPs will fall hard and fast next year and the following year."
ASPs for NOR-based flash memories are projected to fall 20-to-25 percent in 2005 over 2004, he said. ASPs for NAND-based chips are expected to decline a whopping 60-to-70 percent next year, he said.
In total, the flash-memory market hit $16 billion in 2004, according to JLC. Of that, some $9.9 billion represented the NOR market, while the remaining portion was NAND, according to the firm.
The flash-memory business now appears to be cooling down, as Semico Research Corp. last month lowered its forecast for the industry in 2004, with flat growth seen for 2005 (see Sept. 9 story). |
