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 stabilize 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,” Nam Hyung Kim (pictured, left), chief analyst and director at iSuppli, said in a statement. “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 $3.36 billion in Q2, down 2.5% from $3.45 billion 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 (see chart below).
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 $300 million worth of NAND flash memory, up 11.9% from $268 million 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 300-mm 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 300-mm wafer capacity and the 32-nm 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 Co Ltd and Toshiba Corp 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 Corp. 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.
Global NAND revenue market share ranking by (millions of dollars)
| Q2 Rank |
Company |
Q2 revenue |
Q2 share |
Q1 revenue |
Q/Q growth |
Q2 2007 revenue |
Y/Y growth |
| 1 |
Samsung |
1,422 |
42.3% |
1,449 |
-1.9% |
1,382 |
2.9% |
| 2 |
Toshiba |
925 |
27.5% |
942 |
-1.8% |
828 |
11.7% |
| 3 |
Hynix |
450 |
13.4% |
518 |
-13.1% |
430 |
4.7% |
| 4 |
Micron |
300 |
8.9% |
268 |
11.9% |
162 |
85.2% |
| 5 |
Intel |
174 |
5.2% |
166 |
4.8% |
89 |
95.5% |
| 6 |
Numonyx |
74 |
2.2% |
74 |
0% |
70 |
5.7% |
| 7 |
Renesas |
17 |
0.5% |
32 |
-46.9% |
82 |
-79.3% |
|
Qimonda |
-- |
-- |
-- |
-- |
2 |
-100% |
|
Total |
3,362 |
|
3,449 |
-2.5% |
3,045 |
10.4% |
Source: iSuppli, August 2008