Print 63 comment(s) - last by BansheeX.. on Feb 24 at 1:43 AM

After a rough fourth quarter, NAND manufacturers hoped to get a break and instead they got slammed by more bad news, this time from Apple

Apple Inc. last year spent $1.2B USD on NAND flash memory for its consumer electronics devices.  Most of Apple's wildly popular iPod family sports the memory -- the iPod Shuffle, the iPod Nano, and the iPod Touches all use it for storage.  The iPhone also uses NAND, further increasing Apple's already sizable NAND appetite.  Thus Apple's decision hold a significant sway on NAND's fate.

Perhaps predicting slow iPod/iPhone growth, Apple dramatically scaled back its NAND predictions for 2008, sending NAND manufacturers into a panic.  The news, which also may signal bad news for Apple, may be a reflection of the sagging of the U.S. economy, burdened by the U.S. sub-prime mortgage crisis, which has led many analysts to predict a rather dire consumer market for the year.  Apple continues to cut prices in hopes of keeping sales alive, but the outlook is still far from rosy.

iSuppli announced the shifting estimate from Apple on Wednesday, stating, "Apple Inc. has slashed its 2008 NAND order forecast significantly and has informed suppliers that its demand growth will slow in 2008 compared to 2007."

Before iSuppli had predicted a 32% increase in NAND orders for 2008 from Apple.  The change caused iSuppli to drop its estimate for global NAND growth from 27 percent to "single digit" percentage growth from last year's $13.9B USD market.  According to iSuppli in Q1 '08 NAND manufacturers will also invest a 20 percent increase in capital spending, which will increase capacity and lower prices for the consumer, but add further to the suppliers financial woes. 

The year of 2007 held mixed results for NAND suppliers, but still may be looked back fondly upon in comparison to 2008.  In 2007 NAND overall saw 12.5 percent growth.  However in Q3 and Q4 of 2007, six of the top eight NAND producers saw sequential declines in revenue.  Only Micron and Intel escaped this trend.  Samsung and Toshiba, who hold the number one and two spots respectively, were among the losers, but remain on top of the struggling market.

Some top tier NAND suppliers vested in DRAM production as well will get doubly hit, as DRAM is supposed to have an extremely poor year as well, experiencing poor growth of only 4 percent.  While single digit growth may seem acceptable to some, the constant demands for increased capacity at lower prices means that single digit growth typically equates to significant revenue losses.

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RE: Rotten ecomomy?
By FITCamaro on 2/21/2008 3:53:09 PM , Rating: 0
A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury.

Hence why I don't vote Democrat.

RE: Rotten ecomomy?
By themadmilkman on 2/21/08, Rating: 0
RE: Rotten ecomomy?
By clovell on 2/21/2008 4:52:49 PM , Rating: 2
It's actually a fairly well-studied and proven economic theory that tax breaks don't negatively impact tax revenues.

RE: Rotten ecomomy?
By Ringold on 2/21/2008 7:05:55 PM , Rating: 2
To add to that, Google and take a gander at the capital gains tax revenues from the 80s; you'll see steady increases until 1986, when it is learned in the last 3 months of the year that 1987 will see a significantly higher rate. Investors scramble to take all the capital gains they possibly can that year, and then tax revenue collapses, not to return to 1985 levels until 1995. The tax hike lowered revenue.

It's a thing of beauty.

RE: Rotten ecomomy?
By NarcoticHobo on 2/22/2008 12:53:24 AM , Rating: 3
Actually that is referred to as the Laffer curve, something heavily ingrained in supply side economics. Far from being a well-studied and "proven" economic theory it is actually the most controversial theory in all of modern economics.

While there have been documented cases of revenue not decreasing due to tax breaks, there are plenty of documented cases showing the opposite as well.

Just be careful what we are throwing around as facts.

RE: Rotten ecomomy?
By clovell on 2/22/2008 11:09:01 AM , Rating: 2
I was driving more at the 'prime the pump' philosophy than I was at the Laffer curve - which essentially is an illustration that tax rates reach a point of diminishing returns.

RE: Rotten ecomomy?
By Ringold on 2/22/2008 11:13:32 AM , Rating: 2
Of course if you raise tax rates then often enough tax revenue will increase.

However, that's extremely myopic, dealing only in the short term. There's less debate than you let on that higher tax rates lower growth, leading over time to lower tax revenues than the government would have otherwise (within an applicable range of tax rates) -- and, of course, less overall prosperity for the nations economy.

Feel free to google the "Irish miracle." Reaganomics + good oversight (renewed focus on education, for example) took one of the worst economies in Europe and completely turned it around.

RE: Rotten ecomomy?
By Samus on 2/23/2008 8:21:39 AM , Rating: 2
No matter who you vote for, we are still a democracy, FIT. He isn't talking about a party, he's talking about the system. Democratic systems run by democrats or republicans have the same key flaws previously stated.

RE: Rotten ecomomy?
By BansheeX on 2/24/2008 1:43:43 AM , Rating: 2
We are not a democracy, we are a REPUBLIC. What your dumbfck politicians and media chirp to you all day doesn't change this. This has nothing to do with what the party terms democrat and republican have come to define, hence the confusion. Democracy is mob rule while a republic enforces a constitution to protect individual rights from the tyranny of the majority. I suggest you google democracy vs republic and figure this out.

"and to the republic, for which it stands..."

"It seems as though my state-funded math degree has failed me. Let the lashings commence." -- DailyTech Editor-in-Chief Kristopher Kubicki

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