Accelerating retirement of 8” facilities...
remember where you heard it first... not at Goldman, not at ML ..
no LRCX presented the data 18 months ago to CSFB but they still don't get it...
Rapid DRAM price drop shows weakening signs; Toshiba-SanDisk’s leap on next-generation NAND Flash to further boost memory density in consumer electronics
Published Feb.26, 2008
Rapid DRAM price drop shows weakening signs
DRAM spot prices keep heading south after seeing price of DDR2 512Mb eTT and DDR2 1Gb eTT dropped below US$1 and US$2 mark on February 13 and February 15. Price of the former dropped by 15.7% over the weak February 12-20 and closed at US$0.86, where price of the later dropped by 21.3% in the same period and closed at US$1.66.
Yet, the downward price trend shows stabilizing trend in the week February 19-25. Price of DDR2 512Mb and 1Gb stayed at US$1 and US$2 range without further drop. Price of DDR2 1Gb eTT only posted a mere sequential drop of 2.3% only and price of 1Gb eTT even posted a sequential gain of 3.4%.
Industry players commented that marketers generally regard US$0.80 as a price bottom of DDR2 512Mb eTT after information about variable cost was revealed in last December. When price once hit US$0.85, some speculation activities were encouraged and led to a price surge. Given that 1H is the tradition slow season for DRAM, and that recent transaction in the spot market is sluggish, we regard this price up as a temporary price rebound that requires further observation.
Regarding the price trend in contract market, price of DDR2 667 1GB is flat on month at US$18 level. As the price drop in spot market is stronger-than-expected after the Lunar New Year, and that DRAM makers are all subject to inventory level, we believe chipmakers will have a weaker bargaining power for 1HMar deal. Contract price is very likely to stay flat in the next update.
Accelerating retirement of 8” facilities
Overall 2007 DRAM market has been under extremely unfavorable condition all year, with less than ideal demand plus excess capacity from newly completed plants, which resulted in DRAM price falling below variable cost at one point in Q4. According to DRAMeXchange data, tak DDR2 667Hz 512Mb die for example, average price in 2007 fell 55% compared to average price in 2006. Even if DRAM maker operated with 12” facilities on 70nm process, it would still come up with a loss. This losing proposition sped up the retiring of 8” facilities from production of commodity DRAM as a result.
Elpida has sold its only 8” wafer equipments to Cension Semiconductor Manufacturing in Chengdu, China. Qimonda will also stop DRAM production of its 8” facility in Germany and return it to Infineon for logic IC production instead. Qimonda has, in addition, terminated its 8” contract production agreement with SMIC and Winbond at the end of 2007. In addition, Qimonda US has signed a sell-then-lease-back agreement with Mquarie Electronics (USA) Inc. estimated at US$ 289M. Qimonda AG has gone public on a $289M sale and leaseback agreement with Macquarie Electronics for its complete tool set at its 200mm DRAM fab in Richmond, Virginia (http://www.fabtech.org/content/view/5839/). The Richmond facility will reduce 8” wafer production and focus on non-standard (legacy) DRAM products and migrate from 110nm to 80nm process.
Samsung plans to gradually phase out production from its 8 inch plants. Due to the wide product portfolio, the 8 inch plants should be able to continue operating till 2009. The target for 2008 is to reduce the output of standard DRAM and NAND Flash chips, and focus on more advanced manufacturing processes. In Sep07, an 8 inch plant jointly operated by Hynix and ST has been sold to China Resources (Holding) Co., Ltd. They are currently aggressively finding potential buyers for its M9 NAND Flash manufacturing facility. The remaining two plants will see a decrease in the output of standard DRAM and NAND Flash chips, allocating more production to niche DRAM and non DRAM products.
Toshiba-SanDisk’s leap on next-generation NAND Flash to further boost memory density in consumer electronics
Toshiba-SanDisk announced in early February that they plan to introduce 43nm-made 16Gb MLC NAND Flash during March and April, with a prototype of 32Gb MLC NAND Flash to follow in 3Q08. This new component will have a die area 30% lesser than 56nm made 16Gb MLC NAND Flash, the companies claimed. They also announced that they will commence 3-bit-per cell (x3) MLC NAND Flash production on 56nm node during March and April, delivering 20% and more dies than the present standard 2-bit-per (x2) MLC NAND Flash. These announcements highlight the competitive edge that Toshiba-SanDisk enjoy and also mark the race on 4x nm class production.
Thanks to process advancement and mass construction of 12-inch fabs for NAND Flash production, NAND Flash-based applications such as memory card, USB drive, MP3/PMP and handset, are all increasing their NAND Flash storage space rapidly.
Take MP3/PMP for example, when Apple introduced the first iPod nano with built-in NAND Flash in 2005, the device was only available in three memory density, i.e. 1GB, 2GB and 4GB, with the 4GB model priced at US$249. When Apple introduced the new series of nano in September 2007, the maximum density reached 8GB with a price tag of US$199. Currently iPod Touch that supports the highest memory density in the iPod lineup at 32GB, priced at US$499. Its retail price only doubles than that of the first-generation of iPod nano, but memory density is seven folds more.
All these changes happened within three years, highlighting the fact that the critical impact of process node advancement and migration to 12-inch fab production has had on the industry. As Toshiba-SanDisk made the aforementioned announcements, we believe that consumers should see applications building with more NAND Flash memory with cheaper price as what was experienced with the iPod.
NAND Flash contract price recap, 2HFeb
Reviewing February, 2008, after Chinese Lunar New Year, the average NAND Flash contract price of 2H February has decreased about 0-5% due to the traditional off season. Demand for NAND Flash continues remaining flat, and contract price slightly falls. DRAMeXchange expects the market stable condition on both demand and price is likely to last till March.
NAND Flash spot price recap, Feb 18-25
In the SLG segment, 1Gb dropped by 2.9% to US$2.02; 2Gb dropped by 1% to US$2.90; 4Gb dropped by 2.5% to US$4.75; 8Gb dropped by 3.2% to US$9.46 and 16Gb dropped 1.3% to US$5.39. In the MLC segment, 4Gb dropped by 0.4% to US$2.22; 8Gb dropped by 1% to US$2.95; 16Gb dropped by 1.3% to US$5.39 and 32Gb dropped by 1.0% to US$11.42. |
