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NAND ASP’s could decline 60 percent in 06, notes iSuppli |
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Aug 14, 2006 at 06:45 PM |
 With a disappointing second quarter demand for NAND Flash memory devices, iSuppli has adjusted its NAND projections for 2006. Global NAND flash sales declined to $2.7 billion in the second quarter, down 15.7 percent from $3.24 billion in the first quarter, according to the market research firm.
The revenue decline was primarily attributed to the a 33 percent decrease in flash Average Selling Prices (ASPs), which was much steeper than iSuppli's estimates in May 06, that ASP's were expected to decline by 20 percent. The steeper than expected decline meant that although megabyte unit shipments were in line with iSuppli's forecast of about a 25 percent increase the rise did not offset the the decline in ASPs.
The overall per-megabyte ASP for NAND appears to be on track for a nearly 60 percent decrease for all of 2006, exceeding iSuppli's previous forecast of a 53 percent decline for the year.
"NAND ASP declines were due to a flood of supply on the market, as manufacturers ratcheted up production faster than demand grew," said Nam Hyung Kim, director and principal analyst for iSuppli. "On the other hand, the major increases in production allowed NAND flash revenue in the second quarter to increase by a healthy 21 percent compared to the same period in 2005—so not all the news was bad for the NAND market."
The market research firm noted that Hynix Semiconductor was the only company to see a sequential growth in sales for the quarter that was up 5 percent to $505 million.
Hynix increased its market share to 18.5 percent, up from 14.8 percent in the first quarter, according to iSuppli.
"With NAND sales falling short of iSuppli's estimate, we are considering trimming our annual sales growth forecast for this year to the 15 to 20 percent range, down from 37 percent before," Kim said. "iSuppli also may cut its 2007 market forecast due to uncertain demand and intensifying competition ahead."
Surprisingly Kim warned that there were no new killer applications on the horizon and projected that sales growth in 2007 will not reach 2006 levels, even though it is expected
That NAND Flash will start to be used in laptops in increasing numbers next year.
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