This is an unbelievably positive article for Sandisk. I am almost positive that the new line that is mentioned is the previously announced Line 14. It doesnt seem that Samsung plans on shifting much production from DRAM at all.
It also seems that the production schedule of the 8Gb chip has slipped.
sg.biz.yahoo.com
Asia DRAM Report:Flash Boost Won't Cut Samsung DRAM Shr
By Yun-Hee Kim
Of DOW JONES NEWSWIRES
HWASUNG, South Korea (Dow Jones)--Samsung Electronics Co. (005930.SE), the world's largest memory-chip maker, plans to maintain its share in the volatile DRAM market, although it will continue to boost output of the fast-growing flash-memory chips, said a company executive.
"In the DRAM industry, it's very important to maintain a certain level of market share in order to have influence. Just because the flash memory business is growing faster than the DRAM market doesn't mean that we will drastically reduce our DRAM output," Woung Moo Lee, vice president of memory marketing told Dow Jones Newswires in a recent interview.
Lee said that Samsung's investments in its dynamic random access memory business, will continue, to retain its number one position globally. At the same time, the company will address growing demand for flash-memory chips, which is expected to outstrip supply until 2007.
"We will boost our NAND flash output to a degree where it won't hurt our DRAM market share," said Lee.
As part of this plan, Samsung will start a new 12-inch production line in Hwasung in the second half of this year, which will be devoted to producing only NAND flash memory chips. Currently, NAND is produced from an existing 12-inch DRAM production line.
The move is contrary to what some DRAM market participants had hoped as the computer memory chip industry continues to suffer from a supply glut amid lackluster demand for personal computers - where three quarters of DRAM chips end up. Samsung held a 28.5% share of the global DRAM market last year, according to market researcher iSuppli Corp., with the gap still large between No. 2 Hynix Semiconductor Inc. (000660.SE) which held 16.2%. Nevertheless, its market share has been slipping since 2002 when it held 32%, allowing some to wonder whether it may slowly move away from producing commodity DRAM chips to focus on other higher-margin products.
Many DRAM makers had hoped that Samsung's move to boost flash memory chips would mean less DRAM chips landing on the market.
But the new NAND-only line will allow Samsung to increase production of NAND, without having to significantly cut its DRAM production, said Lee.
Similar to DRAM, flash memory chips - used on digital cameras and music equipment - can write and rewrite data but have an upper hand in their ability to retain and store information even when a device is turned off. Samsung and Japan's Toshiba Corp. (6502.TO) are the biggest producers of NAND flash, while Intel Corp. (INTC) and Spansion - a joint venture between Advanced Micro Devices Inc. (AM) and Fujitsu Ltd. (6702.TO) - are the leading producers of NOR flash chips.
NOR chips excel at reading data at high speed, making them suitable for running software, while NAND chips write data at high speed and generally have greater storage capacity.
Lee said the new line will be able to process 7,000 wafers a month from July and more than double the amount to 15,000 wafers by the end of December. To date, Samsung has invested about $1 billion in the new 12-inch line, according to regulatory filings.
Cutting edge 12-inch wafers allow more chips to be produced than older 8-inch wafers, thereby cutting manufacturing costs per chip.
Samsung is devoting a new line strictly to NAND because it is one of the most profitable chip products despite a 35% price reduction in 2004. The company is producing NAND chips using a finer 90-nanometer process technology, which allows it to cut production costs further.
Lee, who has spent over a decade at Samsung developing flash-memory chips as an engineer, said that profit margins from the flash business will surpass that of DRAM by the end of this year. The company doesn't break out its earnings from each business separately.
Demand for NAND will remain strong until 2007, he said, because new applications are expected to spur further growth beyond existing applications such as MP3 players and digital cameras.
"We expect NAND flash to be increasingly adopted as the storage device for video-streaming applications such as videocamcorders," he said. "Tapes used to record streaming video will likely be replaced by NAND flash in the next few years."
Lee forecasts NAND demand to outstrip supply by 5% to 10% this year. Even as more and more DRAM makers boost the supply of NAND due to the relative ease in shifting production with little capital investment, he still expects a "slight" shortage in 2006.
iSuppli expects the global NAND market to grow 8% this year to $7.17 billion; another 36% to $9.75 billion in 2006; and 12% to $10.91 billion in 2007.
As higher density chips are unveiled in the market, prices of NAND flash chips will likely fall at a rate of between 30% and 35% annually over the next five years, Lee projected.
Samsung unveiled a 4-gigabit NAND flash memory chip earlier this year of which it plans to begin mass production in the second quarter. It plans to introduce an 8Gb flash memory next year, said Lee.
While less than 10% of Samsung's total flash-memory output is devoted to NOR currently, Lee said Samsung doesn't have plans to boost the output of these chips despite an anticipated 10%-15% year-on-year growth in demand.
"We are not driving NOR as a strategic product but support customer demands for a total memory solution," he said. |
