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resistion
You can see my assumptions, clearly I was going for ball park, looks I was not ...
mark.lapedus
Hi NAND_analyst! Send me your forecast on NAND. I will edit and post it. I will ...
Analyst: NAND market to 'collapse'
Mark Lapedus
2/22/2011 4:07 PM EST
SAN FRANCISCO - At the 2011 International Solid-State Circuits Conference (ISSCC) here, Hynix, Samsung and Toshiba-SanDisk separately provided more details about their previously-announced, cutting-edge NAND parts.
And for some time, NAND flash vendors have seen stunning growth, due to strong demand in the mobile, tablet PC, solid-state storage (SSD) and other product markets.
But don’t look now, the NAND flash party may be nearly over. Hynix, Micron, Samsung and Toshiba have or will ramp up new NAND fabs-a move that could cause a capacity glut and falling prices.
''We’ve been calling for a collapse (in the NAND market) in the second half of this year,’’ said Jim Handy, an analyst with Objective-Analysis.
Demand is expected to remain strong in NAND. Average selling prices (ASPs) for NAND have been flat for over a year, but ASPs are expected to collapse in the fourth quarter of 2011, Handy said at ISSCC.
At present, NAND sells for $1.60 per gigabyte. By mid-2012, NAND is expected to fall and hit $0.65 per gigabyte, a 40 percent drop, he said.
The problem is that there is too much fab capacity coming online. Micron Technology Inc. is ramping up a new NAND fab in Singapore. Toshiba Corp. has announced a new fab, dubbed Fab 5. And Samsung Electronics Co. Ltd. is reportedly readying a new fab, dubbed Line 16.
At ISSCC, meanwhile, Toshiba and SanDisk presented a paper about a 151-mm(square), 64-Gbit device, based on multi-level-cell (MLC) and 24-nm technology.
Hynix Semiconductor Inc. talked about a 32-Gbit MLC line based on the technology. And market leader Samsung Electronics Co. Ltd. talked about a 64-Gbit, three-bit-per-cell line based on 27-nm.
And for some time, NAND flash vendors have seen stunning growth, due to strong demand in the mobile, tablet PC, solid-state storage (SSD) and other product markets.
But don’t look now, the NAND flash party may be nearly over. Hynix, Micron, Samsung and Toshiba have or will ramp up new NAND fabs-a move that could cause a capacity glut and falling prices.
''We’ve been calling for a collapse (in the NAND market) in the second half of this year,’’ said Jim Handy, an analyst with Objective-Analysis.
Demand is expected to remain strong in NAND. Average selling prices (ASPs) for NAND have been flat for over a year, but ASPs are expected to collapse in the fourth quarter of 2011, Handy said at ISSCC.
At present, NAND sells for $1.60 per gigabyte. By mid-2012, NAND is expected to fall and hit $0.65 per gigabyte, a 40 percent drop, he said.
The problem is that there is too much fab capacity coming online. Micron Technology Inc. is ramping up a new NAND fab in Singapore. Toshiba Corp. has announced a new fab, dubbed Fab 5. And Samsung Electronics Co. Ltd. is reportedly readying a new fab, dubbed Line 16.
At ISSCC, meanwhile, Toshiba and SanDisk presented a paper about a 151-mm(square), 64-Gbit device, based on multi-level-cell (MLC) and 24-nm technology.
Hynix Semiconductor Inc. talked about a 32-Gbit MLC line based on the technology. And market leader Samsung Electronics Co. Ltd. talked about a 64-Gbit, three-bit-per-cell line based on 27-nm.
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subman
2/22/2011 4:55 PM EST
1.60 to 0.65 is more than a 40% drop...did the article mean to say a 40% annualized drop?
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JJB
2/23/2011 7:05 PM EST
In a discussion I had with Jim Handy he mentioned a 60% decline. The 40% number was likely a misquote.
Jim does his homework and I would take his word on this. The forecast is definitely in line with past price collapses for NAND Flash.
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JJB
2/23/2011 9:15 PM EST
The 60% is by mid 2012 if I remember correctly.
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mranderson
2/22/2011 5:44 PM EST
The numbers are wrong. This analyst predicting a collapse is probably wrong as well. I don't see fab capacity being an issue in the next year or two, particularly since demand for technology products remains healthy.
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NAND_analyst
2/22/2011 9:05 PM EST
I find this analysis bizarre. Not just because his numbers are wrong, as others have pointed out. Of course NAND prices are going to fall. And of course they are going to fall at least 40%. But they probably won't fall to .65 in Q4. Sure capacity is coming online. But fabs aren't brought up in a day or a month or even 6 months. Transitions to new nodes aren't even completed in 6 months--even if the vendors actually wanted to do this, they couldn't do it. Micron announced their transition to 25nm over a year ago, and they still aren't at 100% 25nm--not even close. Sandisk has said that they expected output Fab 5, which they will share with Toshiba, to be maybe 5% of their output in 2011. Everyone is keenly aware of the dynamics of new fabs, and they are all bringing them up slowly.
A 40% drop in ASPs over the next 12-16 months will actually be normal and even welcomed by the vendors, especially since their costs should come close to approximating that kind of drop. The reason it will be welcome is twofold: first, because it will allow tablet and smartphone prices to either drop or to add more storage capacity, depending on the strategy of the vendor. And second, because it will go a long way toward enabling the SSD market, which will eat up all of the new capacity from those fabs coming on line.
This article contains very superficial analysis. I would be surprised if it accurately reflects Jim Handy's work.
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Stillwater
2/23/2011 2:16 PM EST
The author appears to have meant a 60% drop to 40% of current prices (from $1.6o to $0.65 per GByte.
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ArtB_#1
2/23/2011 4:00 PM EST
This is another example of bad journalism. Not only are the facts and figures questionable, but only one side of the issue is presented. The other side would include facts showing that rapid increases in demand for NAND flash will likely exceed available capacity in 2011 and extending into 2012, if not even further. Good journalism would present both sides of the issue, with appropriate references.
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Code Monkey
2/23/2011 5:07 PM EST
How many consumers are going to say "Gee, I have plenty of flash in my iPod or iPad"? They will always want more, and the price drop will allow manufacturers to give it to them.
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jaybus
2/24/2011 7:41 AM EST
Even if it does affect downward pressure on the price, NAND will still make money by selling in greater quantities. The demise of NAND flash will more likely be that it is made obsolete by memristors or some other superior technology, meaning it will be profitable for some time to come.
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resistion
2/24/2011 10:18 AM EST
The world population is ~7 billion, and if 10% each bought $20 of NAND in the year, that is only $14 billion market, which is enough for maybe two NAND fabs. So it could be hard to justify fabs.
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NAND_analyst
2/24/2011 6:08 PM EST
A market of $14b, and big enough for only 2 fabs, huh? Funny, there was close to $20b of revenue for NAND vendors in 2010, and that doesn't include controllers, which are key for NAND.
It is hard to take your post seriously.
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resistion
2/25/2011 3:56 AM EST
You can see my assumptions, clearly I was going for ball park, looks I was not too far off. $20 billion is still around 3 fabs (or not even, there is an 8.9 billion price tag reported by Toshiba), so I doubt it would help to have everyone rush at once.
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Duane Benson
2/24/2011 6:28 PM EST
Another missing point in this article is the "tipping point." Currently, SSDs are being adopted incrementally, in more of an evolutionary transition. They will continue to slowly grow in popularity and adoption until the market "collapses" and prices dive for the ground. That's the tipping point.
From then on, the transition from HDDs to SSDs will leap into revolutionary speed. The entire equation of supply / demand and growth capacity will change at that point and every bit of current research data on the industry will be rendered obsolete.
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mark.lapedus
2/24/2011 6:36 PM EST
Hi NAND_analyst! Send me your forecast on NAND. I will edit and post it. I will post other forecasts from analysts as well. I always welcome different points of view. (It just so happen I ran into Jim at ISSCC.) Just send your forecast to: mark.lapedus@ubm.com
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mark.lapedus
2/25/2011 1:11 AM EST
Hi NAND_analyst! Send me your forecast on NAND. I will edit and post it. I will post other forecasts from analysts as well. I ALWAYS welcome different points of view. (It just so happen I ran into Jim at ISSCC. He had the guts to make a forecast-AND CALL A DOWNTURN.) Just send your forecasts to the following address: mark.lapedus@ubm.com
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