As Micron gears up to battle Hynix for more market share,
the research company lowers its 2008 NAND annual flash revenue
growth forecast from 9% to "virtually zero," noting that unless
NAND prices stabilize during Q4, even such flat growth may not be
possible this year.
A battle is brewing in the NAND market as the industry’s major
player fight each other for the little, if any, growth the flash
segment may produce this year on falling ASPs (average selling
prices), a slowing economy, and intense competition.
ISuppli Corp today reported that it has lowered its 2008 NAND
annual flash revenue growth forecast from 9% to “virtually zero,”
noting that unless NAND prices stabilise during Q4, even such flat
growth may not be possible this year.
“The flash industry is abuzz with talk about solid-state drives
(SSDs) and other emerging applications that could drive new NAND
demand,” said Nam Hyung Kim, chief analyst and director at iSuppli.
“However, none of these applications is expected to change the
momentum of the NAND business anytime soon. With the gloomy
economic outlook, excess inventory, slow orders, and weak consumer
spending, the NAND market will remain under pressure for the
foreseeable future. With its extensive use in consumer-oriented
products like MP3 players and digital still cameras, NAND is highly
susceptible to changes in macroeconomic conditions.”
The market research company said that it now believes the global
NAND flash per-megabit ASP will decline by about 60% in 2008,
compared to its previous forecast of a 56% decline.
According to iSuppli, global NAND flash memory revenue declined
to $3.36bn in Q2, down 2.5% from $3.45bn in Q1. iSuppli further
reported that in the June quarter five of the top seven NAND
suppliers posted either declines or zero growth in revenue compared
to the March quarter.
To be true, however, Q2 was not bad for every major player in
the NAND market. Micron Technology Inc bucked the weak NAND market
conditions in Q2 and sold $300m worth of NAND flash memory, up
11.9% from $268m in Q1, according to iSuppli’s data.
That near 12% increase was the largest percentage and revenue
growth of the top seven suppliers ranked by iSuppli and, said the
market research company, narrowed Micron’s NAND flash memory
market-share gap with Hynix Semiconductor Inc, setting the stage
for a battle for the industry’s third rank this year.
No. four ranked Micron’s share of global NAND revenue market
increased to 8.9% in the June quarter, up from 7.8% in the March
quarter. Therefore, Micron in Q2 trailed No.-three ranked Hynix of
South Korea by only 4.5 percentage points, down from 7.2 percentage
points in Q1, iSuppli’s data showed.
The market research company credited Micron’s market-share
advance to its production ramp of 300mm wafers and its plan to
migrate nearly half of its NAND flash manufacturing to the 34-nm
process geometry by the end of 2008.
“In the memory world, process migrations and wafer scale are two
crucial factors in driving down costs,” Kim said. “Micron has
rapidly increased its 300mm wafer capacity and the 32nm geometry
will boost its profitability in the near future, as well as its
productivity. Because of its aggressive production ramp, Micron now
is challenging Hynix for the market’s No.-three spot—and by the
first half of 2009 likely will be in a position to vie with
industry leaders Samsung Electronics and Toshiba in terms of
profitability.”
iSuppli said that because Hynix is expected to focus mainly on
DRAM throughout 2008, Micron’s NAND market share gap with the rival
will narrow further.
According to iSuppli’s data, the only other company besides
Micron to achieve sequential NAND memory revenue growth in Q2 was
its manufacturing partner, Intel. Intel posted a 4.8% increase in
revenue, giving it a market share of 5.2%, up from 4.8% in Q1.
Top NAND flash memory supplier Samsung in Q2 maintained its
market lead with a 42.3% share of global revenue. Crediting its
diverse product lines, iSuppli said Samsung was the only profitable
NAND supplier during Q2.