With Samsung Electronics officially denying that recent NAND flash price drops have led the leading memory maker to shift a considerable amount of NAND flash capacity to DDR2 production, industry observers stated they had no reason to doubt Samsung’s claims.

Samsung will not shift a significant amount of NAND flash capacity to DRAM production, as it expects NAND flash pricing will rebound in the short-term, according to Woosik Chu, senior vice president of investor relations at Samsung, as cited in a recent Dow Jones report.

Merrill Lynch echoed the sentiment in saying that the chipmaker would not shift any “meaningful” NAND flash capacity to DRAM, as the firm would then be exposed if NAND flash pricing rebounds, according to a recent published report. In addition, Korean chipmakers are showing minimal interest in any NAND/DRAM conversion, the investment bank added.

InSpectrum, a Taiwan-based research firm, also stressed the “opportunity cost” that Samsung would suffer if it were to undertake any major capacity transition, as it would take a month for the capacity to transition to actual output. In addition, Samsung would then be exposed to any DRAM price fluctuation that could take effect in the meantime.

Despite iSuppli stated it observed Samsung and rival Hynix Semiconductor started to convert production from NAND flash to DRAM, the market research firm also described the recent DRAM market as being “overheated” and it predicted that the current price rebound phase is set to end soon.

DRAMeXchange shares similar sentiments, stating that it has not seen any critical NAND capacity transition to DRAM from Samsung. The memory trading firm also stressed that Samsung will continue increasing both types of memory capacity through 2006 but predicted that NAND flash wafer starts should grow by 25% on year and exceed that of DRAM in 2006.

By: DocMemory
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