The following market conditions should have a dramatic effect on Catalyst over the next few quarters. Even though they say they are not focusing on Flash they will definitely benefit.
IMHO
Bilog
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Flash-memory shortage deepens
By EBN Staff
Electronic Buyers' News
(07/30/99, 06:59:15 PM EDT)
The flash memory shortage is growing far worse than observers predicted six months ago, according to several industry executives, who warned last week that the situation could persist for another three years.
Several vendors, including Advanced Micro Devices Inc. and Atmel Corp., last week emphasized the scarcity of flash-memory chips, especially high-density parts, at separate company presentations made at the BancBoston Robertson Stephens Semiconductor Conference here. Citing strong demand from set-top box and cellular phone makers, Atmel is “booked out” [of high-density devices] for the rest of the year, said B. Jeffrey Katz, vice president of marketing at Atmel.
In fact, suppliers are quoting distributors lead times of between 18 and 20-plus weeks, said Jan Salsgiver, president of Arrow Electronics Inc.'s North American Components Operation.
“I think you'll find that Atmel is not the only one who's sold out,” said Alan Niebel, analyst for Semico Research Corp., Phoenix. “Demand is hot. Granted, pricing is not going up across the board, but for most densities there are certain devices for which prices are increasing.”
According to NECX, AMD's 8-Mbit TSOP product, for example, was priced at a $3.35 low in the open market in early May. By June 25, the price had risen to $5.50, and by July 23, $5.87.
“If you look at [non-AMD] 8-meg products, you'll see they are starting to level off,” said Frank Cavallaro, director of worldwide sales for NECX's Exchange. “Intel's for example was on a sharp incline and has in recent weeks started to stabilize, and other comparable parts have also shown pricing stability.”
Even though customers are starting to see some relief in prices, there's little left to buy. “Most everybody is sold out of Q3 and many are selling out of Q4-both NOR and NAND,” Niebel said.
“Going by fabs being put in place now, the industry is going to be hard pressed to meet demand,” said Ben Anixter, vice president of external affairs at AMD, Sunnyvale, Calif.
Anixter told investors last week that the company predicts a two-to-three-year shortage, despite chip makers' efforts to ramp production and increase capacity. In addition, vendors underestimated demand for flash-memory chips; orders from cellular-phone makers alone outstripped industry estimates by between 50% and 100%, Anixter said.
With that kind of momentum, worldwide flash-memory chip revenue is expected to reach $9 billion in 2003 compared with $2.9 billion this year, according to AMD's estimates.
“Demand is accelerating in the areas of cell phones, PCs, hard drives, and network applications, and the new one is MP3, which is taking the NAND-flash market by storm,” Niebel said.
Following a similar move by Fujitsu Ltd., Toshiba America Electronic Components Inc. (TAEC) is shifting production capacity from DRAM in favor of 128- and 256-Mbit NAND-based flash chips. Toshiba plans to boost the non-DRAM ratio of its memory products, including NAND, to 50% of memory output, from 35% today.
“We are positioning NAND flash devices as one of our core memory products, in addition to DRAM, in response to increasing demand for NAND flash products,” said Bob Brown, president and chief operating officer of TAEC, Irvine, Calif.
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