While Taiwan-based memory card testing and packaging houses are experiencing pressure to drop average selling prices (ASPs) due to fierce competition, IC substrate suppliers are also exposed to similar price pressures and expect a 20% ASP drop in 2007, said Kinsus Interconnect Technology.

IC packaging houses usually source IC substrates from substrate suppliers and have controller ICs supplied by their customers. The overall packaging cost for a memory card (regardless of standard) is around US$1. Analysts estimate that the cost for substrate accounts for about 35% of the entire packaging cost. A substrate for a microSD card is about NT$8 (US$0.24) and a multimedia card (MMC) is NT$10-12.

In addition to Kinsus, substrate makers, including Nanya Printed Circuit Board (NPC) and Unimicron Technology, two specialists in goldfinger edge connection, as well as Tripod Technology, which specializes in DRAM module substrate production, and Phoenix Precision Technology (PPT), have all tapped memory card substrate production.

Kinsus, which is now the leading memory card substrate supplier in Taiwan, says customers are requesting lower quotes. The stronger price bargaining power from customers may expose the company to a 20% ASP drop risk in 2007, the company added.

Kinsus currently houses four set of sputtering coaters for goldfinger mounting. Given the growing ASP pressure, the company said it will hold off expansion until after all current facilities run at a full utilization rate.

Kinsus expects seeing NAND flash memory card substrate supply to contribute to a quarter of company sales in 2007. Monthly sales from NAND flash memory card substrate production is expected to climb mildly to exceed NT$150 million in the second quarter of 2007 from NT$120 million in the fourth quarter of 2006.

Chief customers of Kinsus include Orient Semiconductor Electronics (OSE) and Siliconware Precision Industries Limited (SPIL). With customers ramping up orders, Kinsus is now supplying 60-70% of requested memory card substrate to each of its chief customers.

Substrate makers wishing to extend into the NAND flash card substrate segment have to be equipped with goldfinger sputtering coaters. Since each of these units cost NT$2-3 million and the production process relies much on mastering line width on the substrates, technology and cost barriers exist in the market.

PPT, which officially announced its deployment in the NAND flash memory card segment during its January investors conference, is expecting substrate demand for SecureDigital (SD) cards to start picking up from the second quarter of 2007. For NPC, Unimicron and Tripod, their shipment amounts remain limited at the moment.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved