By Peter Clarke, Mark LaPedus EETimes Supply Network (01/03/2007 7:49 PM EST)

SAN JOSE, Calif. — Who is the technology leader in the NAND flash-memory race? It might be a moot point, as vendors face a difficult oversupply situation in the market for most of 2007, analysts warned.

In the meantime, two companies, Samsung Electronics Co. Ltd. and Toshiba Corp., claimed leadership by separately announcing samples — and mass production — of the world's first sub-60-nm NAND flash-memory parts in the marketplace.

South Korea's Samsung (Seoul), the world's largest supplier of NAND flash memories, has begun sampling a 50-nm, 16-Gbit part for use in solid-state disk drive applications. The memory is expected to go into volume production at some time during the first quarter of 2007, Samsung said.

Japan's Toshiba (Tokyo), the world's second largest supplier, is quietly sampling 56-nm NAND flash-memory devices, with initial production slated for January.

Toshiba was originally supposed to roll out 52-nm NAND devices, but the company scaled back its technical targets, and instead, devised 56-nm parts, due to the complexities of the technology, it said.

Other suppliers, including Hynix, STMicroelectronics and the Intel/Micron duo, are scrambling to keep up with Samsung and Toshiba.

Nam Hyung Kim, an analyst with iSuppli Corp. (El Segundo, Calif.), believes that Toshiba is slightly ahead of Samsung despite the announcement in the sub-60-nm NAND race.

''An announcement doesn't mean you are sampling,'' Kim said. ''Toshiba is slightly ahead of Samsung [in the sub-60-nm race].''

A leadership position could be a moot point, as the NAND market is expected to be in the oversupply mode at least until the third quarter of 2007, Kim said. ''The market will be challenging in 2007,'' he said. ''We expect oversupply until Q3. In Q4, we expect shortages.''

In 2007, the NAND market is projected to hit $14.188 billion, up 17 percent over 2006, according to iSuppli. Bit growth is expected to jump 149 percent in 2007 over 2006, but average selling prices are projected to fall by 53 percent this year, according to the firm.

NAND prices fell by an average of 61 percent in 2006. And vendors faced an oversupply mode for the entire year, causing some companies to exit the business, namely Renesas Technology Corp. and Qimonda AG.

It has been a tough market in recent times. ''Everyone is unhappy with the price drop in NAND,'' said Frankie Roohparvar, vice president of NAND development at Micron Technology Inc. (Boise, Idaho). ''We look at it as a bump in the road.''