Electronics Production | November 10, 2010
Price Pressure on NAND Flash Makers
According to DRAMeXchange, some NAND Flash vendors can partially ease the price pressure from the weaker demand for memory card and UFD in retail market.
However, different vendors have different pricing strategies in 3Q10 according to their individual product mix and customer mix respectively. Therefore, the 3Q10 sales of different branded NAND Flash makers demonstrated mildly up or down conditions respectively. Nevertheless, 3Q10 sales ranking of branded NAND Flash vendor are quite the same as the circumstance in 2Q10. Overall branded NAND Flash 3Q10 quarterly bit shipment growth is about 17% QoQ while ASP declined about 9% QoQ since some vendors adopted the aggressively price-cut promotion to stimulate the demand from memory card & UFD customers. As a result, 3Q10 branded NAND Flash vendors recorded US$5.1bn revenue, up 6.9% QoQ compared with US$4.76bn in 2Q10. From the 3Q10 branded NAND Flash vendors market share perspective, Samsung remains its leadership with 39.7% market share and US$2.029bn revenue while Toshiba tapped in No.2 with 35.7% market share and US$1.821bn revenue. Micron ranked in 3rd place with 10.2% market share and US$522M sales, followed by Hynix with US$478M sales. Intel grabbed in No.5 with US$256M revenue. 3Q10 Operation Analysis of branded NAND Flash makers Samsung Electronics Co., Ltd. Benefited from the OEM orders from smart phone and tablet PC related system product customers, Samsung can ease the price decline pressure from the weaker procurement demand for memory card & UFD in retail market. 3Q10 quarterly bit shipment growth recorded in about 10% QoQ while ASP declined about 5% QoQ, resulted in the 5.2% QoQ revenue growth in US$2.029 bn revenue in 3Q10 and 39.7% market share. Although Samsung expect the embedded product order from some system product customers will still sustain in 4Q10 and result in about 20% QoQ bit shipment growth, however ASP will likely decline about 15% QoQ. Hence, Samsung will continue raising 2xnm portion to strengthen the low-cost advantage as well as the product & customer mix adjustment (i.e. white-brand memory card , UFD PCBA, MCP, Movi-NAND & SSD etc.) to penetrate into more marketing channels. Toshiba Toshiba can sustain the bit shipment growth in 3Q10 from the help of some memory card strategic partners and stable OEM orders from some system product customers. Toshiba’s ASP moderately declined and bit shipment significantly grew in 3Q10 so that 3Q10 quarterly revenue increased 15.3% QoQ to US$1.821bn while market share is 35.7%. In addition to the higher output portion of 32nm node technology achieved in 3Q10, Toshiba will also boost the output portion of 24nm node technology and TLC products to strengthen the low-cost competitiveness as well as expand capacity from the jv. fabs with SanDisk. Toshiba will also continue on the product mix adjustment (i.e. white-brand memory card, MCP, eMMC & SSD) and the increase in the customer portion of system products to diversify the business scope. Micron Technology Inc. /Intel Corporation Influenced by the delayed delivery from some customers, Micron quarterly bit shipment growth slightly decline about 7% QoQ. However, quarterly ASP slightly decline about 3% QoQ while revenue declined about 8.6% QoQ to US$522M benefited from the owned distribution channel--Lexar and stable OEM orders from system product customers. 3Q10 market share recorded in 10.2%. Micron has completed the acquisition for Numonyx in May and will aggressively raise the embedded memory business exposure in smartphone and tablet PC. Also with the mass production plan of the new 300mm JV fabs in Singapore, output will be also pulled up quarter by quarter in 2011. In 4Q10 Micron will also enhance the output from 25nm node technology and turn it as the mainstream node products at the purpose of low-cost advantage strengthen. Impacted by weaker demand from end customer and price-cut promotion, Intel 3Q10 ASP significantly declined and bit shipment slightly grew while 3Q10 revenue declined about 15.3% QoQ to US$256M. 3Q10 market share records in 5%. Intel will also raise the output portion from 25nm node technology to enhance the low-cost competitiveness, and boost the sales portion of SSD to ease the price pressure. Hynix Semiconductor Co., Ltd. Since 3Q10 end customer demand is weaker than expected, 3Q10 ASP sharply decline about 23% QoQ but bit shipment growth increases about 42% QoQ at the effort of price-cut promotion. Also benefited from the Korean Won depreciation, 3Q10 revenue grows 21.4% QoQ to US$478M. Hynix records 9.4% market share in 3Q10. Also, the progress of output portion from 32nm nodes is also faster than original expectation and result in the ease of impact on profitability from price pressure. 4Q10 Hynix will try to raise the exposure in system product customers to broaden distribution channels and boost the output portion of 26nm node products to strengthen the low-cost advantage. Hynix expect 4Q10 supply bit growth will continue grow about 15% QoQ since Hynix already sharply lowered the price to end customer in 3Q10 and ASP is expected to decline about 10% QoQ in 4Q10.