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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: slacker711 who wrote (27468)	2/18/2005 2:33:26 PM
From: slacker711	Read Replies (1) \| Respond to of 60323

Tight supply seen in NAND flash despite downturn siliconstrategies.com Silicon Strategies 02/18/2005, 9:51 AM ET SAN JOSE, Calif. — Despite the current downturn in ICs, the NAND-based flash-memory market will see a relative supply/demand balance in 2005 — with possible shortages seen on the horizon. "Oversupply fears in 2004 were overstated," said Satya Chillara, an analyst with investment banking firm RBC Capital Markets Inc. (San Francisco), in a recent report. "We continue to see relative supply/demand balance in 2005 and 2006." In 2004, there was a total demand of 65.1-petabytes (PB) of NAND flash in the market, verses a total supply of 65.2-PB. "In 2005, we estimate bit supply growth of 148 percent to 161.9-PB verses bit demand growth of 149 percent to 161.9-PB," the analyst said. However, average selling prices (ASP) for NAND are expected to decline around 35-to-40 percent per megabyte and cost-per-megabyte will fall in the 35-40 percent range, according to RBC. There are several big drivers in the NAND space, which could cause spot shortages in 2005. "We believe MP3 players and cell phones should be the primary growth markets in 2005 and 2006," according to RBC. "MP3 players have recently been showing signs of exceptional growth, aided by falling NAND memory prices. Flash MP3 players such as the recently introduced Apple iPod Shuffle should absorb large amounts of capacity in 2005, potentially creating a tight supply environment. We believe MP3 players will account for 24 percent of bit consumption in 2005," according to the firm. "We believe cell phones will account for 18 percent of bit consumption in 2006, up from 12 percent in 2005," according to the report. "Cell phone with MP3 and video features should drive the consumption of flash in 2006 in the range of 68.0-PB, up 261 percent year-over-year. In particular, MP3 and video features are increasingly available in the WCDMA and CDMA EV-DO related phones." South Korea's Samsung Electronics Co. Ltd. will continue to lead the market. "With respect to new entrants, we expect ST/Hynix and Micron to lead the pack with Infineon continuing to lag. Toshiba/SanDisk should be able to achieve above industry bit growth in 2005 and 2006 with 300-mm fab coming online in 2H:05," according to RBC.