08/31/2012 — Jasminehuang
As the eurozone debt crisis lingers
and global economic recovery is progressing slowly in the second quarter of
2012, the NAND flash market is seeing a harsher off-peak season than usual, with
demand below manufacturers’ expectations. Aside from stable demand from certain
tablet PC and smartphone clients in preparation for new models release, the
majority of system product have not shown strong demand; thus, suppliers have no
choice but to adopt promotional strategies, lowering prices to stimulate
purchasing. According to DRAMeXchange , a research division of TrendForce ,
with the NAND flash market experiencing oversupply, although brand
manufacturers’ bit shipments increased by 13% QoQ in the second quarter of 2012,
average selling price (ASP) fell by approximately 22% QoQ. As a result, NAND
flash branded manufacturers’ total 2Q12 revenue fell by 11.9% QoQ, arriving at
US$4.221 billion.
Looking at the 2Q12 sales ranking for branded NAND
Flash manufacturers, Samsung remained in first place with US$1.788 billion,
42.4% market share; Toshiba took second place with US$953 million, 22.6% of the
market; Micron came in third with US$648 million, 15.4% of the market. SK Hynix
was fourth at US$503 million, 11.9% of the market; and Intel placed fifth with
US$330 million, 7.8% of the
market.
Samsung
In the second quarter
Samsung strategically lowered the sales ratio of memory card and UFD market
products, which have been experiencing weak demand, increasing OEM orders for
smart phones, tablet PCs and SSD products instead to increase revenue from
system product clients. Furthermore, benefitting from depreciation of the Korean
won, 2Q12 bit shipment volume increased by approximately 35% QoQ, while ASP fell
by around 18% QoQ. Thus, Samsung’s 2Q12 revenue climbed 10.1% QoQ to US$1.788
billion, taking 42.4% market share. Although Samsung anticipates the
supply-demand status will improve in the third quarter due to the arrival of new
smart mobile devices and slower bit supply growth, the maker will continue to
devote its efforts to increasing sales of embedded products such as eMMC, mSATA,
and SSD. Additionally, the Korean manufacturer plans to reallocate its Austin
fab’s NAND flash product line to the production of LSI products in order to slow
bit output growth, in preparation for the possibility that global economic
uncertainty will negatively affect the peak sales season in the second half of
the year. Thus, Samsung’s bit output for the third quarter is projected to
increase by over 5% QoQ; the maker’s 27nm and 21nm process product output ratio
reached 80% in the second quarter, and they will continue increasing the
production ratio of 21nm products in the third
quarter.
Toshiba
Affected by sluggish demand due
to the off-peak season and slow global economic recovery in the second quarter,
the orders from some system product, memory card and UFD customers were
lower-than-expected in 2Q12. The ASP and bit shipment of
Toshiba both
declined in 2Q12. Thus, Toshiba’s 2Q12 revenue declined about 39.4% QoQ in 2Q12,
taking 22.6% market share with a revenue of US$953 million. The majority of
Toshiba’s production has been upgraded to 24nm and 19nm process technologies,
and the maker will continue to increase the output ratio of 19nm process
products in the third quarter to strengthen cost competitiveness. The supplier
will also strive to increase the sales portion of embedded products like eMMC,
mSATA, and SSD, to meet inventory stocking demand for new smartphone, tablet,
and ultrabook models hitting the market in the second half of the year.
Additionally, on July 24 Toshiba announced a temporary 30% capacity cut at its
owned Yokkaichi site, in hopes of easing the impact from delayed third quarter
demand from inventory restocking and global economic uncertainties as well as
helping the industry achieve balanced supply and demand prior to the peak sales
season in the fourth quarter.
Micron
In its
previous fiscal quarter, Micron’s ASP fell by 39% QoQ due to the off-peak season
effect, product mix adjustments, and promotional sales strategies. However,
benefitting from system client OEM orders and an increased sales ratio for SSD
products, Micron’s bit shipment volume jumped by approximately 68% QoQ,
resulting in a revenue of US$648 million for the last fiscal quarter, taking
15.4% market share. As the supplier will continue increasing the production
ratio from the new 20nm process, the maker expects its bit output for the next
quarter will increase by over 5% QoQ. Expecting smart phone, tablet PC, and
ultrabook demand to increase significantly in the second half of the year,
Micron will continue to increase the sales ratio of embedded products such as
eMMC, mSATA, and SSD.
SK Hynix
In the second
quarter SK Hynix increased system product client sales to lower the negative
impact from sluggish memory card and UFD market demand. Furthermore, benefitting
from depreciation of the won, 2Q12 bit shipment volume increased by around 9%
QoQ. However, as ASP dropped 19% QoQ, SK Hynix’s 2Q12 revenue fell by
approximately 8.6% QoQ to US$503 million, taking 11.9% market share. As SK
Hynix’s system products bit shipment ratio has already reached 85% in the second
quarter, the maker will continue to increase the sales ratio of embedded
products such as eMMC, mSATA, SSD etc. in the third quarter. Furthermore, SK
Hynix will change their capacity plans for its 300mm Fab M12 depending on actual
market demand in the second half of 2012; the new capacity of 40K starts per
month initially dedicated to NAND flash production will be used to flexibly
manufacture both NAND flash and DRAM products, in an effort to slow NAND flash
output growth in the face of a peak season that may not see traditional figures
due to global economic sluggishness. Thus, SK Hynix expects its 3Q12 bit output
will grow by over 5% QoQ. Looking ahead to the third quarter, the Korean maker
anticipates the market will see balanced supply and demand as market supply
decreases and new smart phone and SSD models hit the market. SK Hynix’s 26nm and
20nm production ratio is nearing 90%, and in the third quarter the maker will
continue increase 20nm output.
Intel
As a result
of harsh competition on the SSD market, Intel’s ASP fell by around 20% QoQ,
while bit shipment volume rose by approximately 15% QoQ. Thus, Intel’s 2Q12
revenue fell by 9.6% QoQ to US$330 million, representing 7.8% of the market. In
the third quarter Intel will continue to increase both the sales ratio of SSD
and mSATA products and the output ratio for the new 20nm process.
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