Wednesday, January 31, 2007
SanDisk said it foresees a 50% on year fall in average selling prices (ASPs) per megabyte (MB) in 2007 but that demand from consumer electronics will increase. Besides predicting a persistent ASP downward trend, SanDisk said its expansion and technology migration remains on track.
After witnessing NAND flash ASPs plummet in 2006, SanDisk predicts another 50% drop in 2007. Given the anticipation of demand from a wide range of consumer electronics applications, the US-based leading memory application supplier, remains bullish about overall demand despite the anticipated ASP drop.
SanDisk said per MB consumption will be encouraged along with the ASP drop and the company should see growth in gross margins. However, the company also warned that if the current supply and demand situation persists, severe ASP drop pressure will emerge and any ASP drop exceeding 60% on a yearly basis will dampen the company's gross margins, though further boosting per MB consumption.
While observing a pile up of some NAND flash-based components from December that brought a stiff price decline recently, SanDisk said some chipmakers are also building up their multi-level cell (MLC) NAND flash capacity at a faster pace than demand growth in the first quarter of 2007, indicating stronger price pressure will come.
Although assuming the worst in ASP pricing, SanDisk emphasized that NAND flash ASPs will not drop more than 60% on year for a prolonged period because chipmakers cannot not reduce their cost consistently in line with the pace of ASP.
Because of this, the industry will adjust and SanDisk is already seeing signs of "self correction," like capacity reallocation from NAND flash to DRAM. Overall, SanDisk believes the present demand and supply situation will improve.
For SanDisk, the drop in prices is not discouraging expansion plans since there is strong demand from applications such as music and video phones, Vista-enable PCs, solid-state drives (SSDs), video imaging and content applications. While preparing to introduce 56nm production at Toshiba's 12-inch fab (Fab 3) at Yokkaichi, Nagoya, Japan later in the first quarter of 2007, SanDisk will boost the monthly capacity at this plant from 90,000 wafers in the fourth quarter of 2006 to 125,000 by end of 2007.
In regards to the speculated Fab 4 with Toshiba, however, SanDisk said there
By: DocMemory
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