Despite seeing no signs of improvement in the DRAM business in 2007, United Test and Assembly Center (UTAC) anticipates healthier NAND flash conditions to arrive in the fourth quarter and expects its memory card assembling business will add SanDisk as a vital new customer.

UTAC Taiwan president Chung-Cher Tsai indicated that oversupply of DRAM should persist through late 2008 while the NAND flash market should be improved in the fourth quarter of 2007. Although seeing leading chipmakers like Samsung Electronics and Hynix Semiconductor adjust their capacity mix, the gap between supply and demand judges price trends, he said. When the gap between DRAM supply and demand enlarges to two percentage points, an unbalanced market situation will arrive, he pointed out.

Although stressing that a further price drop is unlikely as DRAM makers will not leave price to trend irrationally, Tsai said DRAM oversupply will not see any improvement before 2008. Given that the current price of DRAM has exceeded production costs.

NAND flash, on the contrary, should meet market equilibrium in the fourth quarter of 2007 amid warmed up demand for high-density applications and penetration growth. However, Tsai was cited by a Chinese-language Economic Daily News (EDN) report as saying that only Samsung and Hynix have the flexibility to convert one memory to another, any aggressive shift to NAND flash may lead to shortages of DRAM in return.

Tsai is optimistic about UTAC's potential partnership with SanDisk, anticipating that the company could serve as a new outsourcing partner with SanDisk after the recent completion of validation. Since UTAC's process allows NAND flash chips to be directly mounted onto substrates via a bolding process and later go through molding as end products, the simplified process should speed up delivery and reduce equipment costs accordingly, Tsai noted.

Some industry players, on the other hand, have their doubts over UTAC's card assembly solution, saying that UTAC has adopted a relatively rare solution compared with its peers and this solution is mostly applied to low-end and mainstream memory cards only. Persistent ramp up of memory card capacity is also another concern, given that the industry may see capacity oversupply in 2008, these players noted.

Besides performing in-house backend production at its Shanghai plant, SanDisk currently outsources its memory card production to packaging houses including Siliconware Precision Industries (SPIL) and STATS ChipPAC. In Taiwan, SPIL and Orient Semiconductor Electronics (OSE) house the largest memory card capacity with the former having a monthly capacity surpassing 10 million and the later 7-9 million.

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