Capacity transfer won't hurt DRAM supply
Staff -- Purchasing, 3/18/2004 2:00:00 AM
DRAM buyers should not be overly concerned about the practice among DRAM manufacturers of transferring production to NAND flash. Reason: The NAND business for DRAM manufacturers is still minimal.
Market intelligence provider iSuppli estimates that about 15% of DRAM manufacturing will be transferred to NAND flash production in 2004. That isn't enough to cause any serious supply problems for DRAMs. A lot of NAND flash production involves older DRAM facilities or lines which were not producing leading edge DRAMs, although Samsung is producing some NAND with 90 nanometer process technology.
Samsung was first to transfer some capacity to NAND and Hynix is partnering with STMicroelectronics to produce NAND. Hynix will allocate between 130,000 and 140,000 wafers in one DRAM line for flash memory, according to iSuppli.
DRAM manufacturers are transferring DRAM capacity for several reasons. For one, NAND is being used in more equipment, including digital still cameras, MP3 players, personal digital assistants, mobile handsets and USB/pen drivers, among others.
In addition, NAND's fab process is similar to DRAM. Both manufacturing processes use a similar number of mask layers. Little additional investment is required by manufacturers to transfer DRAM production to flash. Older DRAM facilities can be used for NAND, which means lower NAND wafer costs and higher profitability.
The transferring of some DRAM capacity to NAND is good news for flash buyers. It should result in downward price pressure. Samsung has said it expects a 40% bit price drop this year for NAND flash, one reason Samsung will increase NAND production on 90-nanometer technology using 12-inch wafers.
Expect NAND flash prices to rise
07/16/2009NAND flash prices drop
05/17/2006Expect NAND flash shortage in 2010
10/07/2009DRAM supply to tighten
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