Hynix Semiconductor’s NAND flash memory sales surged by more than 500% in 2005, propelling the company into third place in the market last year, and putting it into contention with Toshiba for the number-two rank in 2006, according to El Segundo, California-based market research firm iSuppli Corporation.
Hynix’s NAND flash memory revenue rose to $1.4 billion in 2005, up 525% from $221 million in 2004. The South Korean chipmaker’s strong performance allowed it to surpass Japan’s Renesas Technology and take the number-three rank in NAND flash memory sales in 2005, up from fourth place in 2004.
Hynix gained momentum at the end of year, with more than 40%, or $600 million, of its 2005 NAND revenue coming in Q4, putting the company within $80 million of rival Toshiba, which posted revenue of $680 million for fourth quarter.
In contrast, Toshiba’s NAND revenue was nearly twice as high as Hynix’s in the third quarter.
“Hynix’s stunning performance in the fourth quarter likely was due to rising NAND sales to the MP3 player and removable flash storage card markets,” said Nam Hyung Kim, director and principal analyst with iSuppli, in a statement. “Furthermore, Apple in 2005 engaged in negotiations with Hynix to supply NAND flash for its wildly popular iPod nano music player. Hynix was tasked to act as a second source to Apple’s main NAND supplier, Samsung Electronics.”
The rapid sales gains at Hynix have set the stage for a fierce NAND market-share battle with Toshiba in 2006, with the battle promising to be riveting, with both companies gearing up for the fight, iSuppli believes.
Hynix intends to boost production of its cost-effective Multi-Level Cell flash memory this year, as it makes a run for the number-two ranking. In a recent conference call, Hynix announced it would devote $3.4 billion to semiconductor capital spending this year, iSuppli noted.
Meanwhile, Toshiba and partner SanDisk Inc. plan to accelerate the production ramp at their 300mm fab to 70,000 wafers per month by the first quarter of 2007, up from 25,000 per month now.
Despite Hynix’s outstanding performance, it still didn’t achieve the fastest NAND growth rate in Q4, the honor of which went to Hynix’s manufacturing partner, STMicroelectronics, which sold $89 million worth of NAND flash in fourth quarter, up 64.8% sequentially from $54 million in the third quarter. For the entire year, STMicroelectronics attained NAND revenue of $215 million, up 760% from $25 million in 2004.
Micron Technology achieved the fastest growth of all NAND flash memory suppliers in 2005, with its sales rising to $238 million for the year, up 2375% from just $8 million in 2004.
Samsung in 2005 continued to dominate the NAND flash market with a 52.9% share. However, its share declined from 58.7% in 2004.
The worldwide NAND flash market grew to $10.9 billion in 2005, up 64% from $6.6 billion in 2004. iSuppli predicts the market will continue expanding this year, with global sales rising to $16.8 billion, up 55% from 2005.
