Why 2010 will be “happy memory” — and 2011 too

May 6, 2010 – After 2+ years of slogging, there are happy tidings all around for memory firms in 2010 as demand increases, capacity tightens, and ASPs rise, according to a market analyst.

CJ Muse from Barclays Capital lays out the sunny roadmap for memory firms, now that demand visibility has opened up. His conclusion: only Samsung seems to be doing anything like frontend-loading its capex, so most other memory firms will press their spending for the second half of the year.

  • Samsung: The firm has been saying for months that it would increase its capex from planned levels of 5.5 trillion won (~US $4.9B); in fact it already began to ramp up in mid- to late-2009 by "aggressively" pursuing immersion litho tooling, and by 4Q raised its possible capex roof to nearly 9T won ($8B). Now, Muse says, the company could well spend up to 10T won (nearly $9B) across its memory, LSI, and Austin businesses.
  • IM Flash: The Intel-Micron JV has "come back into the mix recently," with planned orders in 2Q-3Q, Muse says.
  • Toshiba: Tentativeness until its fiscal year-end means the Japanese chipmaker will have to press ahead to spend its $2B+ capex in the next three (calendar) quarters.
  • Hynix: Only about $400M of its pledged $2B capex has been spent — ditto the strategy as with Toshiba above.
  • Nanya, Inotera: Conversion to 50nm is slow; the Micron group wants to pull in 4Xnm transition from 2011 into 2H10. Meanwhile, Elpida has raised its capex to $1B, and Rexchip had a "well-received IPO" in Taiwan, Muse notes.

Bottom line of the above statistics: only Samsung seems to be spending "in a meaningful way" in the first half of 2010 — and everyone else will follow with increased investments later, in the second half of the year. Thus, Muse sums up, "memory spending will only trend higher in 2H10 and 2011."


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