Low Flash Memory Prices Pressure Chip Makers
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In an article presented Thursday at DigiTimes, there was more bad news for manufacturers of NAND flash memory. And perhaps another negative for Apple (AAPL) was revealed.
The reporters announced that Apple has not yet started making big procurements of NAND flash memory thus far in 2008. With NAND already selling below cost, according to sources at Taiwan memory makers, this lack of demand from a major customer could make a bad situation worse for NAND manufacturers. We have already had an announcement from Intel (INTC) that their margins are being hurt by the persistent pricing problems in NAND flash. It can only be a matter of time before we hear the same tune from SanDisk (SNDK), Micron (MU), Samsung and others.
As for Apple, a number of their new product announcements have involved flash, such as the solid state drive in the MacBook Air. Many existing products are heavily dependent on flash including the iPod and iPhone. Having purchased approximately $1.2 billion worth of flash in 2007, the perceived lack of orders is unnerving to flash vendors. Is bellwether Apple seeing weaker demand?
As for the flash manufacturers, consider this quote from the DigiTimes article: "As memory makers can now hardly tune their capacity mixture with DRAM when the DRAM industry is also experiencing a trough, the downward NAND flash price trend seems to have no catalyst to make prices trend upward in the near term..."
Looks like it could be a tough few quarters for the memory makers and those companies that sell semiconductor manufacturing equipment to them. And maybe Apple, too.
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This article has 7 comments:
I'm just saying...
And, if AAPL is unsure of their own demand, definitely better to stay on the spot market unless supplies start to look tight.
Perversely, generally speaking, in the current market, the longer AAPL goes without entering into new contracts, the less their supplies will cost.
reinharden
Flanders,
Nantucket
Perhaps it might help if he worked it out on paper, with Facts rather than erroneous intuition.
Tiedeman
I only see the these descriptors applying to the above article.
Breakfast
As for the macbook air, its hard to know what Apple's sales forecasts were so its hard to know whether or not sales are meeting expectations. On the other hand, go look at Amazon's best 100 sellers and you'll see that the "Air" is in place number 26 (up 20 from the week before). Except for the Asus tiny sub-sub-notebook, the Air is the leading sub-notebook even if you generously use 4lbs as the sub-notebook cut off. It's Sony competition is number 66 on the list as I write this.