Mark LaPedus Courtesy of EE Times (01/09/2008 11:15 AM EST)

SAN JOSE, Calif. -- The mood is changing at Toshiba Corp., especially for its NAND flash efforts.

Not long ago, Toshiba (Tokyo) was sold out of NAND. In fact, the company was recently turning away some 25 percent of its orders in the arena due to huge demand. Toshiba is the world's second largest NAND supplier, behind Samsung Electronics Co. Ltd.

There are still some shortages right now, but average selling prices (ASPs) are down and the climate is cloudy. ''Toshiba states there is a now a 10 percent shortage versus 25 percent in September due to increases in supply from Toshiba, Samsung, Hynix, and others. Toshiba's wafer capacity for NAND flash is to increase by about 26 percent by March, 2008,'' said David Motozo Rubenstein, an analyst at Jefferies Japan Ltd. (Tokyo).

Now, for some bad news. ''After a recent update from the company, we believe that NAND flash memory prices are trending below [Toshiba's] assumptions,'' he said in a report.

''The firm expects a 40 percent year-over-year decrease in prices for FY3/08, but NAND flash prices have fallen over 30 percent in the past two months,'' he said in a report. ''NAND contract prices have also fallen more than expected, over 15 percent in the past month.''

Overall, NAND spot prices continue ''to slip as the industry entered 2008,'' said Joseph Unsworth, an analyst with Gartner Inc., in a report. For the seven-day period ended Jan. 4, multi-level cell (MLC) products fell on the spot market. 4-Gigabit MLC parts fell some 10 percent during the period, followed by a 5 percent drop for 16-Gbit parts, according to the firm.

"The 8-Gbit MLC price was essentially flat but will certainty fall further as an oversupply situation heightens in the first quarter of 2008, and pressure from the 16-Gbit parts weighs in,'' he said.

''The seasonality that plagues the NAND industry is being exacerbated by a sluggish migration to higher-capacity products,'' he said. ''The present abundance of NAND supply is not going to move over to DRAM as it did in the first quarter of 2007, because the DRAM market is in worse condition than the NAND market at the moment.''

Others have a different view. Demand for NAND flash is expected to increase by 130 percent year-on-year, expressed as bit growth, according to market tracker DRAMeXchange, with greater demand coming from all major end user segments, notably mobile handsets, MP3/PMP players, digital cameras and USB Flash drives.

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