Mannerisms

The NAND flash industry is, apparently, seeing both phenomena, according to analysts iSuppli.

"The NAND flash industry  is experiencing the fundamental challenge of declining demand elasticity," says Nam Hyung Kim, iSuppli's chief analyst, "with sufficient capacity in their existing flash storage cards and USB flash drives, consumers don't need to upgrade their products and are not as sensitive to price declines as they used to be."

Can it be true that people don't want more capacity? Ever since Bill Gates' famous line: "640K ought to be enough for anyone," it has been a sine qua non that if you build a bigger memory, people will buy it. I can only think this is a temporary blip.

The other cruncher in the iSuppli report is that it expects NAND unit growth to fall to 71 per cent in 2009 after five years in which annual unit growth has averaged 192 per cent.

The awful state of the NAND industry can be seen from the fact that, iSuppli expects the NAND market to fall in dollar terms by 14 per cent this year and 19 per cent next.

A $14 billion market of 2007, NAND is expected to reduce to a $12 billion market this year and $10 billion next year.

ASPs fell 60 per cent last year (twice the Moore's Law projected rate) and are expected to fall 62 per cent this year and 50 per cent next year.

Why do they do it? A memory CEO once told me he felt like a 'modern gladiator'. Can Samsung, Hynix, Toshiba Intel and  Micron really feel that way? Are they doing this out of blood-lust?