SAN JOSE, Calif. Samsung Electronics Co. Ltd. has delayed the shipment of its 8-gigabit NAND flash part, while the company is also quietly developing a new 4-bit-per-cell NAND technology, according to American Technology Research Inc.
The disclosures, made during its second-quarter results on Friday (July 14), revealed that Samsung (Seoul, South Korea) has delayed its 8-Gbit multi-level-cell (MLC) NAND part "by a quarter," according to the research firm.
At the same time, the company is expanding its product offerings. "Samsung is coming up with its own version of 4bits/cell technology to go into production in 2008," said Satya Chillara, an analyst with American Technology Research (Greenwich, Conn.), in a report.
The 4-bit flash technology enables four bits of information to be stored on one flash memory cell twice as much as 2-bit/cell MLC NAND flash wafers manufactured through equivalent lithography allows.
Samsung's technology would be competitive to M Systems Flash Disk Pioneers Ltd. (Kfar Saba, Israel), Saifun Semiconductors Ltd. (Netanya, Israel) and others. M Systems said that it expects to start mass-producing its recently-announced, x4 NAND flash components by early 2007.
Saifun has developed a 4-bit-per-cell technology, dubbed Quad-NROM. It has licensed the technology to Infineon, Spansion, among others.
Samsung's disclosure also comes at a tough time for the company. Battered by seasonal weak demand and tumbling prices, Samsung reported a second consecutive quarterly drop in operating profits. Steeper-than-expected price drops in NAND flash memory were the main culprit. But prices started to stabilize in May, as demand embedded flash and multichip packages improved, slowing price declines.
Samsung's Q2 bit-growth for NAND was up 17 percent, but average selling prices (ASPs) were down 32 percent. For Q3, Samsung projects that NAND bit-growth will jump 35 percent, while ASPs will fall only 7-to-8 percent.
For 2006, the company predicts NAND bit-growth of 170 percent, down from 180 percent in its original forecast. ASPs are projected to fall 55-to-59 percent, which is much worse than its original forecast of 50-to-55 percent, according to American Technology Research.
Samsung's "guidance does not bode well for the NAND industry," said Chillara, who believes that the trends will impact M Systems and SanDisk Corp.
"We believe the NAND flash revenue generated by Samsung in Q2 '06 suggests that NAND royalties for SanDisk in Q3 will decline by about $12-13 million compared to our model of $81 million, according to the analyst.