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According to The Korean Times, Samsung is to accelerate the migration of NAND flash devices to its 42nm node process in an effort to improve profitability as ASPs continue to decline rapidly due to the continuation of the oversupply situation, further compounded by weaker demand. The Korean Times quoted an unnamed Samsung spokesperson that said that it was currently ramping 42nm MLC flash devices to 10 percent of production capacity by the end of 2008 at one of its most advanced 300mm fabs in Giheung, Gyeonggi Province, Korea.

Samsung claimed in the report that its 42nm devices were about 40 percent more cost-efficient than its 51nm technology and approximately 60 percent lower in cost than its 57nm technology.

The Samsung spokesperson was also reported as saying that, "We will transfer our chip processing technology to an even finer 39nm level in the first quarter of 2009.”

However, Gartner noted in its weekly newsletter to clients that NAND flash prices have plummeted with 8Gb and 16Gb MLC NAND devices dropping to $2 on the spot market, which are below cashcost for all manufacturers at the 4Xnm process geometry node, regardless of ‘maturity.’

The market research firm said that it was alarming that with Toshiba and SanDisk supposedly having more than 50 percent of NAND production at the 43nm node by the end of the year, they can still remain unprofitable due to the ASPs being so low.

With continued overcapacity, weak demand and declining ASPs, Gartner expects the oversupply situation to continue through the first quarter of 2009, which it expects will prompt further capital spending cuts and capacity expansion push-outs.

Aggressive scaling is expected to continue; however the cost reductions this gives are not sufficient to make a profit in the current and short-term future.