Samsung is slipping and have plenty of headaches this year. They were supposed to have 30% of the o/p from 50nm by 3Q and now that has moved to 4Q07. Obviously they are having difficulties with 50nm ramp. I also believe, Samsung is being a bit too optimistic about it's nand margins for 2Q. They will certainly be better than 1Q but Toshiba/Sandisk will keep the pricing pressure on so that they have to cutback on nand production by retiring some of their 200mm fab capacity.
-Pam
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Samsung: "Handsome" profit from NAND flash production in 2Q
Esther Lam, DigiTimes.com, Taipei [Monday 16 April 2007]
While expecting DRAM profit to bottom in the second quarter, Samsung Electronics sees a completely different scenario for its NAND flash business and projects a "handsome" profit, according to the company during a recent investors conference.
Samsung observed that NAND flash prices stabilized from February after experiencing a price plummet from the fourth quarter of 2006. The company also noted that demand is showing strong recovery. During the price weakness, Samsung stressed that it battled back by rolling out more price competitive solutions such as embedded single-level cell (SLC) NAND and NOR flash, instead of adjusting capacity with DRAM.
Demand for NAND flash is guaranteed in the second half of 2007. The company projects robust demand driven by high-end MP3 players, portable media players (PMPs) and music phones with music phones are expected to see significant penetration rates in handsets. Company also projects increasing or additional orders from card makers and distributors, driven by pre-stocking for an anticipated shortage in the second half of 2007.
Supply balance will not be interrupted in the meantime. Samsung projects that expansion among chipmakers will be slow as a result of a mix of capital expenditure (capex) from prolonged profitability decline and previous delay of next generation process mass production. For Samsung itself, it projects its quarterly NAND flash bit growth to be in the low single digits in the second quarter and 110% on year in 2007 as a whole.
Already seeing proven yields from 60nm NAND flash production, Samsung will kick in 50nm production late in the second quarter and expects the introduction to deliver a more than 15% gross die advantage over major competitors. The proportion of 50nm NAND flash will grow to 30% during fourth quarter of 2007. The company stresses that NAND flash production will be most profitable in the second quarter. Samsung expects seeing NAND flash prices to trend up by 20% on quarter in the second quarter, after experiencing a 43% on quarter price decline in the previous quarter. |
