Intel continues NOR Flash market share decline
Tuesday, 07 November 2006
Market research firm iSuppli has released preliminary ‘Top-Five Suppliers' of NOR-type flash memory for the third quarter of 2006. Spansion has easily retained its number one ranking position with sales of NOR flash rising to $675 million in the third quarter, up 3.1 percent from $655 million in the second quarter. Not surprisingly, Spansion's market share has risen from 30.6 percent in the second quarter to reach 31.7 percent in the third quarter, according to iSuppli.
Dr. Bertrand Cambou, President and CEO of Spansion, had noted in a recent conference call with financial analysts that revenues had increased by 31 percent since 3Q05 and that the company had "gained further market share against our largest competitor."
That competitor was Intel Corp, which in contrast had posted NOR revenue of $466 million during the third quarter, which was down 10 percent from $518 million in the second quarter. However the longer-term picture shows that revenues are actually down 18.5 percent from $572 million as seen in the third quarter of 2005.
Paul Otellini, Intel Corp. CEO also acknowledged in the company's third quarter conference call to discuss financial results that he believed the NOR Flash division had lost some market share in the quarter.
"Most of our business [NOR Flash] is still primarily large customer based. Coming off of the shortages last year, we were not able to move into the channel as rapidly as we would have liked—in terms of expanding our product line. And so from my perspective, that probably cost us a little bit of share, offset by a slightly better pricing scenario than we would have had otherwise in NOR. We are looking for NOR to grow...in the fourth quarter," commented Otellini in the conference call with financial analysts.
STMicroelectronics, ranked third by iSuppli, achieved NOR revenue of $335 million in the third quarter, down 7.2 percent from $361 million in the second quarter, but up 15.1 percent from $291 million in the third quarter of 2005.
Samsung is also building revenues in the NOR market place and has grown the fastest of the major players in the last 12 months, growing 38.1 percent year-on-year, though from a relatively low base.
However, the battle for leadership in NOR Flash is not over. Intel has been combining its NOR manufacturing and Flash technology development teams into a more unified operation in an effort to gain better operating efficiencies as well as improved market response. Andy Bryant, Intel's CFO, remarked in the same conference call that Intel was "starting to see the benefits of that shift playing out in our operating expenses and in our factory expenses as we go through the successive quarters."
Spansion has also been concentrating on improving operational efficiencies as the price erosions and slight over-capacity scenario could continue into 2007. The company recently announced the shedding of two aged fabs in Japan, which will reduce overheads but the company has also been working on additional NOR Flash capacity without increasing capital expenditure. This is being handled by using TSMC as a foundry at the 110nm node, which is allowing Spansion to free up capacity at Fab 25 to migrate quicker to the 90nm and 65nm nodes. Spansion has also announced that it will be extending the foundry deal with TSMC to include production on 300mm wafers at the 90nm node in the middle of 2007.
Table: Preliminary Ranking of the Top-Five Suppliers of NOR-Type Flash Memory in the Third Quarter of 2006 (Ranking by Revenue in Millions of U.S. Dollars)
fabtech.org |
