NAND Pricing and Forecast—Second Quarter 2005

Semico Research Releases Report: NAND Pricing and Forecast—Second Quarter 2005

Phoenix, Arizona July 28, 2005 - What if your market were growing so fast that you could never quite match supply with demand? That’s what NAND makers are facing now, and according to Semico Research Corp., the phenomena is bound to continue. The firms latest NAND forecast points to the market’s enormous growth, and its upside demand from unexpected new applications which has been taxing manufacturers’ ability to match supply with demand, causing unexpected price collapses and shortages.

Capacity mismatches will result in price slides during overages and skyrocketing revenues during shortages. These price slides are not enough to keep the market from reaching a $36.1 billion peak in 2008 just before a price collapse in 2009.

“NAND megabytes are absolutely ballooning - megabyte growth will average 129% over the term of the forecast,” said Jim Handy, Director of Nonvolatile Memory Services at Semico Research Corp. “At a growth rate of 100% the industry ships more megabytes in one year than it has over the whole history of the market. In fact, more NAND megabytes shipped in 2004 than DRAM did in the entire 1990s!”

This not only affects existing suppliers: Samsung, Toshiba, SanDisk, Renesas, and M-Systems, but also the emerging suppliers: companies like Hynix, STMicroelectronics, Micron Technology, and Infineon. Meanwhile the card suppliers: like Lexar Media, Kingston, Viking Technologies; camera companies, like Nikon, Olympus, Kodak, Canon, & Fuji Film; MP3 Player companies like Apple, Creative, and Sony, and some of their suppliers like SigmaTel, all have to wait with baited breath trying to anticipate what the NAND business will do next. “We hope that the report will help them cut through some of this anxiety and doubt,” concluded Mr. Handy.

The Semico NAND forecast methodology is perhaps the most complete and accurate model in the market. Semico’s quarterly 2003 flash forecasts hovered within 4% of actual 2003 revenues, and in 2004, a year marked by a 65% NAND price collapse, Semico’s flash forecast remained within 13% of the actual over the course of the year. The forecast is built upon a model that compares end-application demand, using the Semico MAP model, to production capacity from Semico’s exhaustive fab database. This is layered upon pricing models extracted from historical market behavior, and is continually tested against WSTS history and Semico’s Inflection Point Indicator.

This study is available for immediate delivery for $3,495. To purchase, please contact Jim Feldhan at 602-997-0337 or jimf@semico.com, and reference NV104-05, NAND Falls Back Into a Downturn: Second Quarter 2005 Pricing & Forecast.

To purchase 2005 is Just Not NOR’s Year! Second Quarter 2005 Pricing & Forecast, Report Number: NV105-05, please contact Mr. Feldhan as well. To review more information on either report, please visit http://www.semico.com/studies/category.asp?id=8

This Week in the News
Semico News Release July 28, 2005: NAND Makers Struggle to Keep Up: Huge Megabyte Growth Hard to Accommodate! Semico Research Releases Report: NAND Pricing and Forecast-Second Quarter 2005

Semico News Release July 27, 2005: Shortened Product Life Cycles: A Good Thing? Semico Research Releases Report: Foundry Wafer Pricing—Second Quarter 2005
http://www.semico.com/press/press.asp?id=155

Semico News Release July 25, 2005: Semico Forecasts Temperate Conditions Ahead >http://www.semico.com/press/press.asp?id=154

About Semico
Semico Research Corp is a marketing and consulting research company located in Phoenix, Arizona. Semico was founded in 1994 by a group of semiconductor industry experts. We have improved the validity of semiconductor product forecasts via technology roadmaps in end-use markets. Semico offers custom consulting, portfolio packages, individual market research studies and premier industry conferences.

www.semico.com