October 3, 2007 – Capital spending should rise about 5% next year, an “optimistic” projection driven heavily by a surge from flash manufacturers, who will surpass their DRAM counterparts in terms of capacity, according to data from Strategic Marketing Associates.

Flash capacity has been on a roll for most of the current decade, growing more than fourfold to 2.9 million wafers/month (200mm equivalent) since 2000, compared with 225% growth in DRAM capacity over the same period. The reason can be summed up in two words: “Alliances” and “Samsung,” according to SMA president George Burns. First, the Toshiba/SanDisk multiphase joint venture is lately dwarfing everyone else in terms of capacity (adding more than Samsung, Hynix, and IM Flash combined), he writes. Fab 4 of the JV’s “Flash Alliance,” inaugurated a month ago with a one-year ramp to 80,000 wafers/month, will have maximum capacity exceeding 210,000 wafers/month, all 300mm wafers — or nearly half a million 200mm wafers. The group’s Fab 3 is the industry’s next-biggest fab at total capacity of 150,000 300mm wafers/month, Burns notes.

Trailing just behind the Toshiba/SanDisk JV is Samsung with 24% share of the industry’s flash capacity, an impressive achievement for the only major flash memory manufacturer going it alone. It’s worth noting that Samsung owns all that capacity, while Toshiba/SanDisk share theirs 50/50, Burns adds.

And the flash memory crush is getting stronger. Since 2005 flash manufacturers have added 6x the capacity they did in the previous four years, “and it’s getting faster,” Burns writes, with 10 more fabs coming online in 2008-2009 which will have total maximum capacity (eventually…not at first) of 1.5M 200mm equivalent wafers/month…that’s 90% of what the industry brought online from 2001-2007.