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To: add who wrote (20528)	7/6/2001 9:12:56 PM
From: puborectalis	Read Replies (2) \| Respond to of 60323

Flash ramp by Samsung spurs fear of price war By Paul Kallender EE Times (07/06/01 17:02 p.m. EST) TOKYO -- Samsung Semiconductor Inc. is ramping mass-production of 512-Mbit NAND flash memory chips, in a move that analysts suggested could prompt a flash market bloodbath. The company claims to have developed a storage cell structure that lowers voltage demands and cuts data write times by as much as 30 percent. Samsung said that it will use existing production lines and a technology that requires fewer process steps on its 0.15-micron process. It said it will leverage that technology to extend the product line into lower-capacity products in the second half. Samsung officials in Korea declined to comment further on the ramp, the performance enhancements or the company's marketing strategy at press time. "It's a political and critical issue," said Jin H. Choi, senior manager of the company's non-volatile memory marketing group. But Samsung's view of the flash market appears to differ radically from that of its competitors and some analysts. Looking to justify the ramp in a soft memory market, Samsung released a statement quoting Semico Research figures that show the flash market could surge by about 98 percent annuallyin the next two years to reach $4.4 billion by 2003. Quoting Semico, the Samsung statement said this year's world market for NAND-type flash memory chips is estimated at $1.2 billion. The Korean memory giant claims to hold a 35 percent market share. Samsung previously has pursued similar strategies in DRAMs and LCD panels, flooding those markets to drive down prices and drive out competitors, according to analysts. Analyst Michito Kimura at International Data Corp. in Tokyo said that after a meteoric rise in both demand and production last year, the flash market has moved from supply scarcity to chronic oversupply. He said Samsung is ramping production even as others are deferring their own ramps or cutting back on existing production to prevent price erosion. The Samsung move, he continued, could result in disaster for flash prices and producers - a scenario much like this year's DRAM market. "It's a bit of a shock. The market is one of curbed demand; it's very soft. I don't think this is a good move," Kimura said. Last year flash sales shot up 135 percent, to about $10.6 billion, spurred by massive orders for the NOR-type flash devices used in mobile phones, research figures show. Production ramped to catch up, but massive overestimates of cell phone demand caused overproduction of between 70 million and 100 million units. Average selling prices at the 8-,16- and 32-Mbit densities are on course to halve between the first and fourth quarters of this year. Adding insult to injury, a report in Japan this week states that sales of NOR-type flash may have declined 2 percent in the second quarter, to 456 million units. Demand for NAND-type memory, which accounts for 12 to 13 percent of the flash market, also looks disappointing, said Kimura. The three biggest markets for NAND-type flash, he said, are the Playstation 2, Sony's Memory Stick and digital still cameras. The four biggest players are Toshiba Corp. Samsung, Hitachi Ltd. and SanDisk Corp. Toshiba cut NAND production "20 or 30 percent, or even more," at the end of the first quarter, Kimura said. Hitachi, the world's third-largest flash maker will at best maintain production and may cut back some, he said. NAND ASPs are hovering perilously close to the break-even point, he added. Meanwhile, Advanced Micro Devices Inc. (Sunnyvale, Calif.) this week blamed weak sales of flash products, as well as price pressures from Intel Corp. in the microprocessor market, for a 17 percent decline in second-quarter revenue compared with the first quarter. But Samsung said it is confident it will find a market for its flash parts in digital cameras, MP3 players, Palm PCs and PDAs. In addition to a 512-Mbit, single-chip package, the memories will be available in a 1-Gbit, stacked dual-dice package and on 128-Mbyte SmartMedia cards.