Wednesday, February 20, 2008
iSuppli Corp. is cutting its outlook for global NAND flash revenue growth by a wide margin citing order reductions and weakness in consumer spending.
The NAND flash market is projected to grow in the single digit percentage range in 2008, down from iSuppli's previous outlook of a 27 percent rise. Global NAND revenue in the fourth quarter of 2007 declined to $4.1 billion, down 2.4 percent from $4.2 billion in the third quarter of last year.
With consumer confidence taking a dive due to the U.S. subprime mortgage crisis, the NAND market outlook appears gloomy. ''Unless the economy recovers vigorously later this year, last year's DRAM market disaster could be repeated in NAND this year," said Nam Hyung Kim, an analyst for iSuppli, in a report.
Here's another bad sign: Apple Computer Inc. has slashed its 2008 NAND order forecast ''and has informed suppliers that its demand growth will slow in 2008 compared to 2007,'' according to iSuppli.
Apple was the world's third largest OEM buyer of NAND flash memory in 2007, with purchases of $1.2 billion, representing 13.1 percent of the global market, according to iSuppli. Before word of Apple's warning, iSuppli had predicted the company's NAND flash purchases would rise by 32.2 percent this year, according to the firm.
On the supply side, capital spending on NAND production will rise by more than 20 percent this year, ensuring easy availability of parts.
''This will cause prices to decrease,'' according to the firm. ''iSuppli believes that NAND prices already are below suppliers' fully loaded costs.''
"In light of these factors, NAND suppliers are likely to go into the red in the first quarter, and are not likely to recover in the second," Kim warned.
By: DocMemory
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