Spansion tops Intel in tough NOR flash market

February 8, 2007 – Market conditions for NOR flash memory weren’t as harsh as in 2005, but it’s still no picnic with ASPs still getting pummeled, especially in the mobile phone sector, according to data from iSuppli Corp.

Worldwide NOR flash revenue rose about 8.1% to $8.49 billion in 2006, led by new king Spansion, which enjoyed 25% growth (and a 10% slide by Intel) to take the top spot for the year, and tack on four percentage points to its annual market share (30.4%). Nos. 3-4 STMicroelectronics and Samsung also surpassed the market’s total growth, with 21.2% and 36.1%, respectively, while Intel lagged behind in a tough year, falling nearly 10%.

Despite rebounding from a “brutal” 15.5% decline in 2005, the NOR flash market was still a tough place to be in 2006, according to Mark DeVoss, senior analyst with iSuppli. Despite increasing unit shipments, suppliers continued to post losses due to severely eroding ASPs in all market segments, but particularly in the largest market segment of mobile phones, he said, in a statement.

Spansion posted the top revenues in the segment in 4Q for the fifth consecutive quarter, but its $687 million in revenues were about 5% below expectations, and the company missed breakeven operating margins, “attributable mainly to a large miss at a single customer in the mobile-phone segment,” according to the analyst firm. Intel, meanwhile, boosted NOR flash sales by nearly 14% in 4Q to $531 million, which suggests it is “girding itself for a head-to-head battle with Spansion,” the firm said.

Intel and ST had a particularly challenging time this past year in the NOR flash segment, both trying to integrate their NAND flash operations and prop up bottom lines, and rumors have swirled about a possible consolidation or even an exit from the market. In December ST essentially created a separate flash memory group amid a product business reorg, to address “industry consolidation and financial deconsolidation.”

Top worldwide NOR flash suppliers, 4Q06 & 2006
(Revenues in US $M)

Company………….4Q06 sales (est.)…..vs. 3Q06……vs. 4Q05……2006 sales (est.)……vs. 2005
Spansion……………………..687…………………1.8%……….14.3%……………2579……………….25.6%
Intel…………………………….531……………….13.9%……..-11.5%……………2052………………..-9.9%
STMicroelectronics……….317……………….-5.4%………..-5.4%……………1340……………….21.2%
Samsung……………………..180……………….24.1%……….57.9%……………..584……………….36.1%
Silicon Storage Tech……….84………………..-2.3%……..-16.8%……………..329…………………0.0%
Others…………………………409………………..-5.1%…………2.5%……………1609……………….-3.2%
TOTAL……………………..2208…………………3.3%…………2.7%……………8493………………..8.1%

Company……….4Q06 share……….vs. 3Q06……….vs. 4Q05……….2006 share……….vs. 2005

Spansion…………………..31.1%…………..31.2%…………..28.0%………………30.4%…………….26.1%
Intel………………………….24.0%…………..21.6%…………..27.9%……………..24.2%…………….29.0%
ST Microelectronics……14.4%…………..15.5%…………..15.6%………………15.8%…………….14.1%
Samsung…………………….8.2%…………….6.7%…………….5.3%………………..6.9%………………5.5%
SST…………………………..3.8%……………..N/A……………..4.7%………………..3.9%………………4.2%
Others………………………18.5%…………..21.0%…………..18.6%………………18.9%…………….21.2%
TOTAL…………………..100.0%…………100.0%…………100.0%…………….100.0%…………..100.0%

WaferNEWS source: iSuppli Corp.

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