NAND oversupply could affect other industries
Edited by Suzanne Deffree -- EDN, December 5, 2008
NAND sales, which consumer products mainly drive, now face crumbling consumer confidence arising from poor global economic conditions. With the challenging retail situation and the inventory overhang among OEM (original-equipment-manufacturer) customers, NAND-chip suppliers have cut chip prices to increase their sales, iSuppli Corp says.
According to iSuppli estimates, unit shipments of 1-Gbyte-equivalent NAND chips will likely rise by 126% in 2008, down from 179% in 2007 but still representing tremendous unit growth. That growth, however, has resulted in oversupply. In 2009, unit growth will decline to 71%, iSuppli projects, noting that, over the past five years, the market has averaged a 192% annual increase.
On the oversupply, analysts expect ASPs (average selling prices) of 1-Gbyte-equivalent NAND chips to drop by 62% in 2008, followed by a 50% decline in 2009.
Decreasing unit growth in the NAND-flash market potentially will affect the semiconductor-capital-equipment industry as NAND-flash suppliers have been increasing their capital spending to increase their capacities. Analysts expect industry spending to decrease by 38% in 2009, according to the company's data.
