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【Market View】NAND Flash market forecast : Shortage likely in 2010

Published Oct.06 2009,18:10 PM (GMT+8)

NAND Flash market forecast : Shortage likely in 2010

From demand side perspective, we expect various of NAND Flash application end product will recover in 2010 given the better global economy. The density of traditional NAND Flash application such as MP3, memory card and UFD will be continuously lifted. Also, new application products such as smartphone will sustain the growth momentum power for NAND Flash market. NAND Flash vendors will keep focus on promoting the SSD in 2010. Therefore, according to DRAMeXchange, 2010 worldwide NAND Flash demand bit growth will be up 81% yoy to 10,986M GB.

From supply side perspective, most NAND Flash vendors will set up the 2010 supply target based on the 2010 demand growth rate to maintain the market at the more balanced status in order to help stabilize price and improve profitability, given most makers are still at the cross over of turning profit. Therefore, NAND Flash vendors are still conservative toward supply expansion plans. According to DRAMeXchange, 2010 NAND Flash total wafer output is expected to mildly exceed the amount in 2009. 2010 CAPEX will be primary applied for technology migration. We expect mass production for 2Xnm technology products will be scheduled at 2H10 since most vendors just adjust up the portion in 3Xnm technology in 4Q09. Also, some vendors just formally announced the mass production plan for 3-bit/cell MLC products in 4Q09 and we expect that the portion will be apparently adjusted up in 2H10 since it takes time to tune the yield and promote the products. Therefore, according to DRAMeXchange, 2010 NAND Flash supply bit growth will grow 79% in YoY basis to 10,759M GB.

According to DRAMeXchange, NAND Flash market will be migrated to slight about 2% shortage in 2010 from the balanced status in 2009 given the disciplined supply control and recovering end-product demands. However, season effects will still impact on the sufficiency issue in quarterly basis. Given the slow season impact, the circumstance of slight shortage in 2H09 will be revised to slightly over-supply in 1H10 and will likely turn to mild shortage again in 2H10 trigger by hot season effects. That is, according to DRAMeXchange, the pricing fluctuation is expected to be less volatile to reflect the cost saving advantage from process technology migration.