Rotten economy promises Rough year for Apple, NAND and DRAM

After a rough fourth quarter, NAND manufacturers waiting for a break and instead of being slammed by more bad news, this time from Apple.

Apple Inc. last year spent $ 1.2B in NAND flash memory devices for consumer electronics. Most Apple wildly popular iPod family sports memory - the iPod Shuffle, iPod Nano, the iPod and all Touches use it for storage. The iPhone also uses NAND, further increasing the already substantial Apple NAND appetite. Thus, the decision of Apple have an important influence on the fate of NAND.

Perhaps predicting slow iPod / iPhone growth, Apple drastically reduced its forecast for 2008 NAND, sending manufacturers NAND in a panic. The news, which also may indicate bad news for Apple may be a reflection of the decline in the U.S. economy, the weight of the USA Sub-prime mortgage crisis, which has led many analysts to predict a consumer market fairly disastrous for the year. Apple continues to cut prices in the hope of keeping alive sales, but the outlook is far from rosy.

ISuppli announced the change in estimate Apple on Wednesday, stating, “Apple Inc. has slashed its forecast for 2008 NAND significantly and has informed its suppliers that will restrain demand growth in 2008 compared with 2007.”

Before iSuppli had predicted a 32% increase in orders for 2008 NAND Apple. The change resulted iSuppli to drop its estimate for growth of global NAND 27 percent to a “digit” percentage growth last year $ 13.9B market. According to iSuppli in Q1′08 NAND manufacturers also reverse a 20 percent increase in capital spending, which will increase capacity and lower prices for consumers, in addition to adding more suppliers financial ills.

The year 2007 held mixed results for suppliers of NAND, but you can still look back fondly when compared with 2008. In 2007 saw NAND overall 12.5 percent growth. However in Q3 and Q4 of 2007, six of the top eight producers saw NAND sequential decline in revenue. Only Micron and Intel escaped this trend. Samsung and Toshiba, who have the number one and two points, respectively, were among the losers, but remain at the top of the struggle market.

Some suppliers of NAND top level corresponds to the production of DRAMs and receive doubly affected, because DRAM is supposed to have a year as extremely poor, which are experiencing poor growth of only 4 percent. While single-digit growth may seem acceptable to some, the constant demand for greater capacity at lower prices mean that the single-digit growth usually amounts to significant revenue losses.