Major Taiwan-based NOR flash suppliers, including Macronix International and Winbond Electronics, saw their earnings receive a boost during the first half of 2010, benefiting from an upsurge in demand for the memory widely used in computing and consumer electronics applications.
Prices for NOR flash memory rose by 20-30% in the first quarter of 2010, and saw another 20-30% rise in the second quarter, as supply growth was unable to catch up to a recovery in demand.
However, an unexpected demand drop arising from Europe's debt crisis later in the second quarter brought forward a balance in supply and demand earlier than expected. The dedicated parallel and serial flash producers, who differ from providers of one-stop-shopping solutions, will no longer enjoy a profit honeymoon.
Macronix chairman and CEO Miin Wu recently commented that the NOR flash market was heading toward a demand-supply balance in the third quarter, and prices for the chips would have little room to rise. Wu in April said that NOR supply would remain constrained and not catch up with demand until 2011.
Winbond also does not expect NOR flash prices to grow substantially in the third quarter, company president Tung-Yi Chan was quoted in previous reports.
In addition, Spansion's recent exit from bankruptcy and Micron's soon-to-be-complete integration with Numonyx will further challenge Macronix and Winbond to make a competitive response. Macronix and Winbond have both unveiled plans to venture into the production of NOR flash memory products for automotive applications. Spansion and Numonyx used to dominate the automotive NOR market, which generates about US$400 million annually.
Macronix said it would initially launch products for dashboards and engine control units, targeting the after-market. The company aims to cut into the supply chain of original car vendors, as an ultimate goal.
Winbond revealed plans to offer both NOR flash and specialty DRAM (SDRAM) products to the automotive sector. The company claimed it is in talks with car vendors in Europe and Japan, gearing up to develop the new business.