Three-bit flash 'leads to Toshiba sales surge'

Toshiba led the pack in the global NAND flash memory market in the third quarter, according to analyst firm iSuppli.

The Japanese memory supplier’s revenue surged by nearly 50 per cent during the period, iSuppli claimed.

Global NAND flash memory revenue in the third quarter rose to $3.94bn, up 25.5 per cent from $3.1bn in the second quarter. Number-two supplier Toshiba dramatically outperformed the overall market in the third quarter, with its NAND revenue booming by 47.5 per cent to reach $1.4bn, up from $924m in the second quarter.

“Toshiba in the third quarter was able to capitalise on favourable NAND market conditions with its expanded capacity and high average selling price (ASP),” said Michael Yang, senior analyst for memory and storage at iSuppli. “The company was able to expand its shipments. Furthermore, the company is the leader in production of three-bit-per-cell parts, which have lower manufacturing costs, thus improving profitability.”

Until recently, MLC flash memories have been two-bit-per-cell devices, which store twice as much data as non-MLC flash. However, Toshiba’s three-bit-per-cell provides higher density at similar cost.

Toshiba’s revenue surge allowed its share of global NAND flash revenue to rise to 34.6 per cent in the third quarter, up from 29.4 per cent in the second quarter, solidifying its hold on the market’s second-place position behind Samsung Electronics.
According to iSuppli, NAND flash average selling prices have grown this year as NAND suppliers slashed production in response to a market oversupply during the fourth quarter of 2008 and the first quarter of 2009. The overall NAND price rose by 18.5 per cent in the second quarter and by 40 per cent in the third quarter. Prices are projected to hold reasonably steady in the fourth quarter with a 2.9 per cent decrease.

“In 2009, NAND flash suppliers decided they no longer wanted to bleed red ink,” Yang said. “By shutting down some of their 200mm production lines, the NAND flash suppliers were able to reverse the oversupply, boosting prices and expanding market revenue.”  

Because of this, the NAND flash memory market represents a rare bright spot in what is expected to be a poor year for the global semiconductor market in 2009. NAND flash actually is expected to achieve double-digit growth with a projected 16.4 per cent rise in revenue for the year. In contrast, global semiconductor revenue in 2009 is expected to decrease by 12.4 per cent.

All six NAND flash memory suppliers achieved double-digit-percentage revenue growth in the third quarter.

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