Global NAND flash revenue rose to $4.36 billion in the first quarter, up 0.6 percent from $4.33 billion during the fourth quarter. This mild increase actually represented a strong performance in the seasonally slow first quarter of the year, when sales typically decline by a double-digit percentage on a sequential basis.
“With the economic downturn persisting until the second half of 2009, there was a lot of pent-up demand for consumer electronic products and semiconductors used in them, including NAND flash,” noted Michael Yang, senior analyst, memory and storage, for iSuppli. “With the economy on the mend, and demand for electronics on the rise, that demand has been unleashed, leading to strong sales for NAND flash in early 2010. This is mitigating the impact of the normal slowdown following the conclusion of the Christmas and Chinese New Year buying seasons.”
What Price NAND?
Beyond strong demand, the NAND flash market in early 2010 is being boosted by strong pricing trends. Against the historical average of 14 percent, average pricing for NAND flash in a 1Gbyte-equivalent density declined by 6.4 percent in the first quarter compared to the fourth.
“With price stability, a cautious sense of normalcy has emerged for NAND suppliers—a welcome change after the uncertainty of 2009,” Yang said. “While demand for traditional NAND strongholds like flash cards and USB drives started to decline toward the end of the quarter, sales are growing at an outsized rate for consumer electronics products and smart phones. The early success of Apple Inc.’s iPad also portends strong growth for NAND demand in tablets.”
Toshiba on the Rise
Toshiba in the first quarter posted the strongest performance among the top NAND flash suppliers, gaining 2.9 percentage points of share compared to the fourth quarter of 2009. In contrast, longtime dominant market leader Samsung lost 1.3 points of share.
Micron Technology, Inc. is the only other supplier that gained share, eking out a 0.2 percent higher share compared to the previous quarter.
“Toshiba and Micron attained leadership in the product migration to three-bit-per cell and the latest geometry, respectively—which redounded to their own benefit in the first quarter,” said Yang.
Whether Samsung can rebuild its lead over Toshiba will hinge on how quickly the two companies add production. Both companies, along with Hynix Semiconductor, Inc., are expected to boost capital spending this year in order to expand manufacturing.
Read More, NAND on Track for a Record Year >