Mannerisms

Beset by losses in the current memory glut, which has seen Samsung turning away Tier One business at unacceptable prices, Micron has been pointing to a slow-down in stepper sales as its route to salvation.

To be so terrifyingly at the mercy of your competitors’ investment plans that this is the best hope you can find of your company’s financial recovery, is to be in a very fragile business sector indeed.

Furthermore, in keeping with the grand tradition of the memory business sector, Micron is saying that, while it expects its competitors to cut back capital spending, Micron will stick to its own $4bn spending budget this year.

This is really in the grand traditions of the memory business when you would get a dozen suppliers each investing in sufficient capacity to take 12 per cent of the market.

What a surprise when it resulted in a glut. What a shock to see the prices tumble. How amazing there’s this law of supply and demand.

Everyone knew in that this was going to be a risky year for memory with substantial investments in NAND flash capacity by IM Flash, Samsung, SanDisk/Toshiba and Hynix.

It was known by mid-2006 that the planned investments in flash capacity would be too high for existing applications, and that demand could only match up to supply if substantial new applications could be found.

New applications like solid-state storage (SSD) for laptops, and the combination of HDD and NAND for fast-boot up, which the Vista OS supported, were expected to mop up the extra NAND capacity.

But the SSD laptops remain resistible, while Vista has had a slow take-up.

It must be nice to be a memory manufacturer. They have this naturally optimistic nature. They always expect to be on the sunny side of the street.

Until it turns out to be Queer Street.

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