Overview of events in the flash memory industry: there is a war of the people
The situation that has developed in the memory market in the past year and a half can only be called catastrophic. As a result of the price war, on which the global economic crisis overlaps, the largest producers suffer losses, factories close, people lose their jobs. For buyers, this situation is certainly on hand, but only in the short term: the cost of R & D and the construction of new factories are declining, which means sooner or later there may be a shortage, especially if we mean the promotion of SSD to a wide market.
At the moment, the situation in the industry is very unstable and, perhaps, we will soon face a big redivision of the market. About him and will be discussed.
The war began at the end of 2006, when companies attracted by the “fastest growing market in the IC industry” made large investments in new NAND factories. A few months later, at the very beginning of 2007, a crisis broke out in the DRAM market: prices fell by 70% (and even more), and many manufacturers reoriented to NAND. All this led to the most severe crisis of overproduction already in this sector.
The situation, which was difficult for many manufacturers in 2007, became catastrophic with the beginning of 2008 - hopes for a turnaround in the market and a rise in prices for memory did not materialize. If at the beginning of the price war in February 2007, some analysts predicted a market recovery by the end of 2007, then today, in the fall of 2008, after the next price drop, there is only mid-to-late 2009. Most factories that do not work on the most advanced technology (substrate size 300 mm and the process of not more than 60 nm) have become unprofitable.
Please note that in the table above, the current situation is compared with last year’s one - then it seemed that there was no place worse ...
Share of company revenue on the NAND market in the second quarter of 2008
Columns: 1- Position, 2 - Name, 3 - Revenue for 2Q 2008, 4 - Market share for 2Q 2008, 5 - Revenue for 1Q 2008, 6 - quarterly growth, 7 - Revenue 2Q 2007, 8 - growth from last year. All amounts in a million dollars.
The crisis hit the Europeans most of all, for which the fall in NAND prices coincided with the growth of the euro and, consequently, production costs. This led to the fact that the company Quimoda (formerly Infineon, even more former Siemens) completely left the market.
Korean Hynix closes obsolete factories in America (this is for Koreans a big blow to the prestige of the company) and Korea.
Micron and Intel have managed to strengthen their positions (primarily due to the presence of advanced technologies). However, their financial reports are not encouraging.
Market leaders Samsung and Toshiba were able, in general, to retain their positions, but recent financial data show a slight decrease in their market share.
')
While the winner looks like Samsung: it is the only company that continues to make profits (there is a small trick: the data of Samsung Electronics include not only the results of the work of the memory-producing department, but also other, more profitable ones, for example, LCD).
Taking advantage of their strong position, the Koreans made a maneuver that shook the entire market: they offered over $ 5 billion in cash for Sandisk, an American company that, although not the leading NAND manufacturer, (they only have 49.9% shares in several joint factories with Toshiba), has a large portfolio of patents, and is also one of the largest producers of mass consumer goods based on NAND. Samsung is forced to give the Americans from 300 to 500 million dollars annually patent deductions.
Sandisk will survive difficult times - the company's stock price has been falling for almost a year. The Samsung offer, made on September 15, provides a significant bonus for stockholders. Since investment funds that are not so much interested in business development as equity income, Sandisk owns a significant amount of shares, there is a high probability that they will exert strong pressure on the board of directors, who, naturally, angrily rejected the first official proposal of Koreans.
The American antimonopoly committee, which will not be delighted with the takeover of the American company by foreigners, is likely to approve the deal: Samsung, unlike other players, does not turn off, but continues to develop production in the US, which means opening new jobs and tax deductions. The seriousness of the company's intentions is also indicated by the fact that before that Samsung did not make serious takeovers, preferring to develop and develop the technology by its own engineers.
Everyone was waiting for Toshiba to make counter offers. The Japanese found themselves in a very difficult situation: giving up Sandisk means losing an important strategic partner and all hopes of fighting for first place in the market, but they cannot kill the Koreans because of a series of incessant financial losses caused by a price war. Today (October 3) they officially declared that there would be no offers.
Given the fact that the NAND market is predicted to explosive growth in 2010-2015 due to the growth in SSD sales, Samsung’s aggressive strategy seems advantageous. Judging by the fact that negotiations with Sandisk and shareholders, according to rumors, have been going on for several months, and losing face, having heard the refusal of their proposal, is an extremely unpleasant thing for Asians, the proposal has been made for sure, and Sandisk's board maneuvers are just to get a price.
If the bet made by Samsung "will play", then we will see on the NAND market what has already happened on the CPU market: the birth of a "super leader" with the most advanced technologies and the lion’s share of the market, and several (1-3) competitors without serious profits, but putting pressure on the leader and forcing him to grow.
In conclusion, I would like to say a few sad words about the prospects of Russian companies in the memory market. Unfortunately, the events of recent years have completely put an end to any attempts by new companies (from any countries that do not have advanced microelectronic industry) to start production: due to low prices, only those who have the best technology can not work at a loss. Since it is impossible to create advanced equipment in Russia on our own, and it’s really possible to acquire only that which is already outdated by at least one generation, there is no possibility of producing memory in Russia, and there will never be.
PS
I will accept comments and criticism with interest - this is my first post.
If the topic seems interesting, I will try to continue the reviews of technology and the market in the field of memory.
At the moment, the situation in the industry is very unstable and, perhaps, we will soon face a big redivision of the market. About him and will be discussed.
The war began at the end of 2006, when companies attracted by the “fastest growing market in the IC industry” made large investments in new NAND factories. A few months later, at the very beginning of 2007, a crisis broke out in the DRAM market: prices fell by 70% (and even more), and many manufacturers reoriented to NAND. All this led to the most severe crisis of overproduction already in this sector.
The situation, which was difficult for many manufacturers in 2007, became catastrophic with the beginning of 2008 - hopes for a turnaround in the market and a rise in prices for memory did not materialize. If at the beginning of the price war in February 2007, some analysts predicted a market recovery by the end of 2007, then today, in the fall of 2008, after the next price drop, there is only mid-to-late 2009. Most factories that do not work on the most advanced technology (substrate size 300 mm and the process of not more than 60 nm) have become unprofitable.
Please note that in the table above, the current situation is compared with last year’s one - then it seemed that there was no place worse ...
Share of company revenue on the NAND market in the second quarter of 2008
Columns: 1- Position, 2 - Name, 3 - Revenue for 2Q 2008, 4 - Market share for 2Q 2008, 5 - Revenue for 1Q 2008, 6 - quarterly growth, 7 - Revenue 2Q 2007, 8 - growth from last year. All amounts in a million dollars.
The crisis hit the Europeans most of all, for which the fall in NAND prices coincided with the growth of the euro and, consequently, production costs. This led to the fact that the company Quimoda (formerly Infineon, even more former Siemens) completely left the market.
Korean Hynix closes obsolete factories in America (this is for Koreans a big blow to the prestige of the company) and Korea.
Micron and Intel have managed to strengthen their positions (primarily due to the presence of advanced technologies). However, their financial reports are not encouraging.
Market leaders Samsung and Toshiba were able, in general, to retain their positions, but recent financial data show a slight decrease in their market share.
')
While the winner looks like Samsung: it is the only company that continues to make profits (there is a small trick: the data of Samsung Electronics include not only the results of the work of the memory-producing department, but also other, more profitable ones, for example, LCD).
Taking advantage of their strong position, the Koreans made a maneuver that shook the entire market: they offered over $ 5 billion in cash for Sandisk, an American company that, although not the leading NAND manufacturer, (they only have 49.9% shares in several joint factories with Toshiba), has a large portfolio of patents, and is also one of the largest producers of mass consumer goods based on NAND. Samsung is forced to give the Americans from 300 to 500 million dollars annually patent deductions.
Sandisk will survive difficult times - the company's stock price has been falling for almost a year. The Samsung offer, made on September 15, provides a significant bonus for stockholders. Since investment funds that are not so much interested in business development as equity income, Sandisk owns a significant amount of shares, there is a high probability that they will exert strong pressure on the board of directors, who, naturally, angrily rejected the first official proposal of Koreans.
The American antimonopoly committee, which will not be delighted with the takeover of the American company by foreigners, is likely to approve the deal: Samsung, unlike other players, does not turn off, but continues to develop production in the US, which means opening new jobs and tax deductions. The seriousness of the company's intentions is also indicated by the fact that before that Samsung did not make serious takeovers, preferring to develop and develop the technology by its own engineers.
Everyone was waiting for Toshiba to make counter offers. The Japanese found themselves in a very difficult situation: giving up Sandisk means losing an important strategic partner and all hopes of fighting for first place in the market, but they cannot kill the Koreans because of a series of incessant financial losses caused by a price war. Today (October 3) they officially declared that there would be no offers.
Given the fact that the NAND market is predicted to explosive growth in 2010-2015 due to the growth in SSD sales, Samsung’s aggressive strategy seems advantageous. Judging by the fact that negotiations with Sandisk and shareholders, according to rumors, have been going on for several months, and losing face, having heard the refusal of their proposal, is an extremely unpleasant thing for Asians, the proposal has been made for sure, and Sandisk's board maneuvers are just to get a price.
If the bet made by Samsung "will play", then we will see on the NAND market what has already happened on the CPU market: the birth of a "super leader" with the most advanced technologies and the lion’s share of the market, and several (1-3) competitors without serious profits, but putting pressure on the leader and forcing him to grow.
In conclusion, I would like to say a few sad words about the prospects of Russian companies in the memory market. Unfortunately, the events of recent years have completely put an end to any attempts by new companies (from any countries that do not have advanced microelectronic industry) to start production: due to low prices, only those who have the best technology can not work at a loss. Since it is impossible to create advanced equipment in Russia on our own, and it’s really possible to acquire only that which is already outdated by at least one generation, there is no possibility of producing memory in Russia, and there will never be.
PS
I will accept comments and criticism with interest - this is my first post.
If the topic seems interesting, I will try to continue the reviews of technology and the market in the field of memory.
Source: https://habr.com/ru/post/40278/
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