For those who don’t recall, Toshiba announced in July that it would immediately cut its NAND flash chip production by a whopping 30%.  This announcement had the desired effect.  Prices instantly rose above their sub-cost level, bouncing from a spot market low of 31 cents/GB immediately prior to the announcement to 36 cents, nearly 20% higher, within 2 weeks.

Some of my audience will remember my blog post at that time, arguing that such a cut would increase Toshiba’s cost structure by 21% while reducing the company’s market share.  Had that actually occurred it would have been pretty bad for Toshiba, especially since prices didn’t rise enough to cover the 21% cost increase.

The graphic for this post compares the NAND market’s five leading vendors’ bit growth and revenue growth from 2Q12 to 3Q12, a period chosen to straddle Toshiba’s purported production cut.  (Micron’s fiscal quarter is offset from calendar quarters, so there’s some room for error in comparing Micron this way.)  Bit growth runs across the X-axis and starts at zero, so Toshiba’s 30% cut would put the company pretty far off the left side of the chart.  Revenue growth is shown on the vertical axis.  All of Toshiba’s competitors, save Intel INTC +0.69% (which doesn’t disclose any NAND flash detail since this is a very small portion of the company’s revenues) provided quarter/quarter bit growth and revenue growth figures for their NAND flash business in Q3, and these appear as dots on the chart.  Toshiba only supplies revenue figures, and its 19% revenue growth is marked as a constant 19% revenue growth line across the graph.

The chart shows a number of interesting points:

•Toshiba’s 19% memory revenue growth during that period was higher than all competitors except for SanDisk SNDK +0.09%•All of Toshiba’s competitors had positive bit growth, but even with bit growth Samsung and Micron suffered declining revenues from Q2 to Q3
•Perhaps most interesting is that the World Semiconductor Trade Statistics (WSTS) which compiles numbers from all the charted companies except SanDisk showed aggregate bit growth lower than that of any of the companies on the chart.

From this we can draw a few conclusions.  The first is that if Toshiba’s revenues really did increase by 19%, as was stated in its quarterly earnings statements, then it did so at a time when most NAND makers had to post significant bit growth just to keep revenues constant.  Second, it seems that Toshiba must have reported a significant decline in bit shipments to WSTS that caused this statistic to show lower bit growth than any of the companies that share their bit growth.

Other NAND flash makers must envy Toshiba for growing revenues despite cutting bit production in a market where that goal eluded all other manufacturers.  Either that, or they must doubt the authenticity of the company’s statements.

By: Docmemory
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