2. Flash Memory Chips Poised to Take Off
Reuters is reporting that high demand for flash memory chips - popular in hot-selling music players and digital cameras - will accelerate later this year, although prices will stay weak as industry leader Samsung Electronics Co. Ltd. holds them down.
According to the news service, Samsung, which controls nearly 60% of the NAND flash market, is cutting prices in a bid to woo electronics makers to use the erasable and rewritable memory chips and undermine emerging rivals.
"Demand for NAND flash (a memory chip technology developed by Toshiba) is going to be explosive in the run-up toward the Christmas holiday season, driven largely by MP3 players and digital cameras," said iSuppli analyst Nam Hyung Kim.
The global NAND flash market is expected to grow by 65% to $10.9 billion in 2007, according to iSuppli.
During that period, overall microchip shipments are likely to expand only 24%, according to industry body World Semiconductor Trade Statistics.
Demand will also escalate as more mobile phone makers include MP3 features in their high-end photo-snapping cell phones.
Samsung said NAND has been undersupplied for most of 2005, except for a short period at the start of the April-June quarter.
"The NAND market should be very tight until the end of 2006, due to entry of next-generation devices like 2-gigabyte and 4-gigabyte MP3 players, high-density memory cards and 3G (third-generation) handsets," said a Samsung spokesman.
Tracking market leader Samsung is Japan's Toshiba Corp., which has a 28% share. South Korea's Hynix Semiconductor Inc. and U.S.-based Micron Technology Inc. also make flash chips.
Despite the strong demand, analysts and industry officials expect the price to fall further as Samsung cuts prices.
"We expect NAND prices to show a steeper drop toward the end of the year - 15% in Q3 and 30% in Q4, with an overall decline of 50% in 2005," the Samsung spokesman said. |
