Hynix, Micron and Intel deliver good performances in Q3 NAND flash market
Hynix of South Korea achieved the strongest growth on a sequential basis, with its global NAND flash revenue rising to US$806 million in the third quarter, up 79.1% from US$450 million in the second quarter.
It was followed by Micron of the United States, whose NAND revenue rose by 75.5% to reach US$285.4 million, up from US$162.6 million in the second quarter. Intel was third, with its NAND revenue rising by 47.9% to reach US$132 million, up from US$89.3 million in the second quarter. However, the U.S. semiconductor giant performed much better on a year-to-year basis, with its revenue rising by an industry-leading 222% compared to the third quarter of 2006.
"Hynix's big sequential jump in NAND revenue was due to its stunning unit shipment growth of 92% compared to the second quarter," said Nam Hyung Kim, director and chief analyst, memory ICs/storage systems for iSuppli. "Meanwhile, Micron's and Intel's explosive growth was due to the companies ramping up production at their NAND manufacturing joint venture, IM Flash Technologies LLC (IMFT)."
NAND flash supplier, Samsung Electronics Co Limited of South Korea, fell short of the industry's average growth rate in the third quarter, causing its market share to decline. Samsung's NAND revenue amounted to US$1.7 billion in the third quarter, up 21.2% from US$1.4 billion in the second quarter. Thus, Samsung's NAND market share declined to 40.2%, down from 45.4% in the second quarter.
Samsung's actual bit growth reached only 4% during the third quarter, missing its guideline for a low double-digit rise, which was issued at the company's second-quarter investor call. Toshiba maintained its market share of 27.2% in the third quarter. The top-three suppliers dominated the market with a combined 87% market share during the quarter.
The NAND flash market enjoyed strong demand growth in the third quarter, contrasting markedly with the weak performance in the DRAM segment. Global NAND flash revenue in the third quarter rose to US$4.2 billion, up 37% from US$3 billion during the same period in 2006. This was very close to iSuppli's forecast of US$4.16 billion in revenue in the third quarter.Megabyte unit shipments rose by 31%, while the per-megabyte Average Selling Price (ASP) increased by 5% compared to the second quarter. This marked the second consecutive quarter of price increases for NAND flash.In contrast, global DRAM revenue decreased by 14% in the third quarter compared to the same period in 2006.
"The NAND market in the third quarter enjoyed a combination of strong seasonal consumer–electronics demand from products including Apple's iPod line and high supply growth," Kim said.
However, the NAND market's growth streak is coming to an end in the fourth quarter. iSuppli expects the NAND flash megabyte ASP to decline by 18% this quarter while megabyte unit shipments will increase by 37%. The two quarter consecutive price surges will turn into consecutive price drops in the fourth quarter and in the first quarter of 2008 due to increased production capacity, which will increase availability and drive down pricing.
With iSuppli recently having downgraded its rating of near-term market conditions for NAND makers to ‘negative' this month, suppliers need to be wary of declining prices during the slow periods of the year, the fourth and first quarters.
