NAND flash sales up, prices down

The sale of new tablet PCs and smartphones with solid state storage technology is compensating for weak demand for memory cards and USB flash drives and has led to a 17 percent increase in NAND flash shipments over the last quarter and an average price drop of about 9 percent.

According to DRAMeXchange, the research division of Trendforce, Samsung continues to lead the market in NAND flash sales, benefiting mostly from smartphone and tablet PC equipment manufacturer sales.

For the third quarter, NAND Flash vendors reaped a total of $5.1 billion in revenue, up 6.9 percent over $4.76 billion in the second quarter.

In its quarterly sales report, DRAMeXchange stated that system manufacturers orders of NAND flash for their mobile devices eased pricing pressure for solid state drive technology, which had climbed and then leveled off for several quarters.

While vendors have different pricing strategies, some vendors adopted aggressive price-cut promotions to stimulate the demand from memory card and USB flash drive resellers, driving down the average selling price for NAND.

NAND flash market share

Samsung remains in the lead with 39.7 percent of NAND flash market share and $2 billion in revenue, while Toshiba took second place with 35.7 percent of market share and $1.8 billion revenue, according to DRAMeXchange. Micron came in third place with a 10.2 percent market share and $522 million in sales, followed by Hynix with $478 million in sales. Intel was fifth with $256 in flash revenue.

Samsung reported NAND flash shipments were up about 10 percent quarter over quarter, while their average selling price was down 5 percent.

Samsung expects embedded NAND flash product orders from some system manufacturers will remain high in the fourth quarter, resulting in a 20 percent increase in flash shipments. The company also expects its average selling price to decline about 15 percent.

Toshiba's average NAND flash selling price declined moderately while its shipment rate grew significantly in the third quarter with revenue up 15.3 percent.

Toshiba expects to boost its output of 24 nanometer (nm) NAND flash technology node technology and TLC products to strengthen the low-cost competitiveness as well as to expand capacity from its new fabrication facility, which it built with SanDisk.

Micron's quarterly shipments of NAND flash grew about 7 percent quarter over quarter, and the average selling price dropped about 3 percent. Micron has completed the acquisition of Numonyx and it expects to aggressively pursue the embedded memory business in smartphone and tablet PCs.

Also, with the mass production plan of a new fabrication facility in Singapore, Micron expects output to jump quarter by quarter in 2011, DRAMeXchange stated. In the fourth quarter of this year, Micron will also increase output of 25 nm flash technology.

Intel's average selling price for NAND flash significantly declined and shipments grew only slightly while revenue declined about 15.3 percent in the third quarter, due to weaker demand from system manufacturers and a price-cut promotions around the industry.

Intel is also expected to increase the output of 25 nm NAND flash to enhance its low-cost competitiveness, and to boost the sales portion of SSDs to ease the price pressure.

Hynix Semiconductor lead the pack in average selling price decline in the third quarter. Prices dropped 23 percent, while NAND flash shipments grew 42 percent through its aggressive price-cut promotion.

The company also benefited from the depreciation of the Korean Won and saw revenue grow 21.4 percent quarter over quarter. Hynix is expected to try to raise market share aggressively to new system manufacturers in order to broaden its distribution channels and boost the output of 26 nm flash products. The company expects flash bit shipments to grow about 15 percent next quarter.

[Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld.]

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