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Toshiba Cuts NAND Flash Production by 30 Percent

By - Source: Toshiba | B 16 comments

Toshiba has just announced a drastic production cut for flash memory devices.

Responding to deteriorating market conditions, weak pricing as well as an oversupply of flash memory in the market, the world's second largest flash maker said that it is scaling down production by 30 percent.

According to the company, oversupply of NAND flash memory USB and memory card devices has caused price declines since early 2012. Toshiba initially reduced its shipment rate, but is now taking more drastic measures and will decrease its production pace at its Yokkaichi Operation plant in Mie Prefecture, Japan.

Toshiba expects macroeconomic concerns to ease in the current quarter and said that it believes that growth rates for PCs and smartphones will improve in the July to September quarter. Once the company demand is picking up, the company said it will be reacting in a "timely" fashion and adjust its production volume again.

 

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  • 6 Hide
    cmcghee358 , July 27, 2012 10:48 PM
    Aww...
  • 3 Hide
    josejones , July 27, 2012 11:21 PM
    So prices should be expected to jump as well then.
  • 5 Hide
    sykozis , July 27, 2012 11:37 PM
    So, in other words....they've produced enough to allow prices to drop, so they're reducing production so they can attempt to justify price increases again later....
  • 6 Hide
    DRosencraft , July 28, 2012 12:10 AM
    sykozisSo, in other words....they've produced enough to allow prices to drop, so they're reducing production so they can attempt to justify price increases again later....


    Yes.

    It's what we've seen in the HDD market, what we've seen in the RAM market. They basically have a car with only two speeds - either they're so fast in development that they have to do these planned holdups so they can let supply drop down a bit. on the other side of it, they're not going to ramp back up in time to keep prices from bouncing up high because of shortages. The best thing anyone can don now is try not to overreact. Don't go buying up flash drives and SSDs anticipating some price hike because you'll probably be contributing to it. And when/if prices do go up, just be a little diligent in looking for deals, and a little patient for them to come down again.
  • 3 Hide
    bison88 , July 28, 2012 12:14 AM
    NAND suppliers getting butt hurt that their product has become essentially a "raw material" and no longer considered to be the more valuable finished product it once was.

    Instead of pushing emerging markets such as the SSD market by building more Fabs, they're just going to limit those markets by lowering production output to jack up the prices and costs, which have been steadily declining. So instead of doing things to push production, they cut production back and jack up the price and hurt said emerging markets.
  • 0 Hide
    Thunderfox , July 28, 2012 3:34 AM
    You want to make flash more profitable? Build bigger SSD's and make them more affordable. Especially with hard drive prices being what they are right now, there is money to be made from SSD sales.

    Or does Toshiba only make the crappy slow flash products that are found in most USB drives and such?
  • 2 Hide
    izmanq , July 28, 2012 6:07 AM
    let's hope other nand flash maker fill toshiba market share, so toshiba can suck its price fixing scheme
  • 4 Hide
    Bricktop , July 28, 2012 9:16 AM
    No other manufacturer is going to fill this gap. About a month ago, Samsung, the largest producer of NAND, and Toshiba agreed to cut back on expanding production. Micron can step it up a bit, but they are not big enough to make up for a larger company cutting 30% of its production.

    There isn't much of an issue here. Obviously, people want cheaper NAND, but companies want a profit. Samsung recently claimed losses in the NAND and RAM production departments of its company. RAM is a terrible market to be in right now for the very same reason NAND is becoming terrible. There is more supply than demand. We are not in a situation where NAND devices are unobtainable, we are in a situation where it is not profitable to produce NAND. The worst case would be if one of these large producers to just drop out of the industry altogether. If people actually start buying SSDs instead of waiting for the price to decline or swapping old SSD's into their new computers, there would be no reason for production cuts.

    Intel doesn't create a new processor and then sell it cheaper than their last generation processors. The stability in the price of processors makes that market incredibly profitable. Numerous SSD reviewers have said that upgrading to an SSD is the single most beneficial computer upgrade you can perform. Yet, people are more willing to spend $200 to upgrade their processor for a 10-20% increase in computational performance than they are to spend $150 on an upgrade from an HDD to an SSD that provides a much more noticeable improvement to performance.

    The NAND industry is looking for more stability in their market. With prices declining on a weekly basis, most people are just waiting for them to hit rock bottom before buying an SSD. No point in buying something today if I can buy it next week for less money, or next month for significantly less. That waiting period is not survivable for the business trying to sell it to you. A more stable system would involve decreasing the price/GB as new process technology is implemented that allows more storage capacity per sq. inch of silicon. If the price of 128GB drives were to change every 6 months instead of every week, people would be less inclined to enter that never ending waiting cycle.

    The idea that a company would intentionally hurt an emerging market that it has billions of dollars invested in is foolish.

    @Thunderfox: Toshiba produces some of the fastest NAND available (Toggle DDR 2.0), along with Samsung. I don't know how far along Micron is with its next generation NAND (ONFI 3.0). I've only heard of the new top performing NAND being marketed for mobile devices (smartphones and tablets).
  • 2 Hide
    alidan , July 28, 2012 5:14 PM
    sykozisSo, in other words....they've produced enough to allow prices to drop, so they're reducing production so they can attempt to justify price increases again later....


    you dont get it. supply is so high, and demand is so low, that if production keeps happening, they could create so much there is no way to turn a profit from it.

    everyone is right now tring to be the best and the cheapest, and they pushed the price way down.

    bison88NAND suppliers getting butt hurt that their product has become essentially a "raw material" and no longer considered to be the more valuable finished product it once was.Instead of pushing emerging markets such as the SSD market by building more Fabs, they're just going to limit those markets by lowering production output to jack up the prices and costs, which have been steadily declining. So instead of doing things to push production, they cut production back and jack up the price and hurt said emerging markets.


    get me the size in of a chip, the nm process used, gb on the chip, get me all that infromation and i can figure out about how much a gb of ssd space should cost.

    ssds are expensive BECAUSE THEY USE SILICON WAFERS, 1 wafer is about 50000$ from beginning to end of the process, at least in the cpu side. this cost can ONLY come down because of

    1) changes in the manufacturing process
    2) shrinking of the manufacturing process.

    intel is building a 450mm plant, this means that in the long run, their chips will get cheaper to make by up to 50%... i forget how much more space there is from a 300mm to a 450mm waffer.

    just because they make a crap ton of memory, doesn't mean that it will be cheaper.

    ThunderfoxYou want to make flash more profitable? Build bigger SSD's and make them more affordable. Especially with hard drive prices being what they are right now, there is money to be made from SSD sales. Or does Toshiba only make the crappy slow flash products that are found in most USB drives and such?


    wrong you want to make it more profitable, you have to make the wafers bigger and shrink the process.

  • 0 Hide
    JohnnyLucky , July 28, 2012 6:40 PM
    Did the manufacturers flood the market or is demand down?
  • 0 Hide
    youssef 2010 , July 29, 2012 11:44 AM
    Incredibly disappointing
  • 0 Hide
    JonnyDough , July 29, 2012 12:10 PM
    All of you sillies complaining or commenting appear to need to understand supply and demand a bit better. That's all this is, plain and simple.
  • 0 Hide
    alidan , July 29, 2012 6:48 PM
    JonnyDoughAll of you sillies complaining or commenting appear to need to understand supply and demand a bit better. That's all this is, plain and simple.


    i dont blame them, but its annoying that it needs to be said every single time.

    this is one market where competition is killing it.
  • 0 Hide
    GreaseMonkey_62 , July 30, 2012 6:48 PM
    It makes sense on Toshiba's part, it just sucks that prices will go back up.
  • 0 Hide
    eddieroolz , July 30, 2012 9:15 PM
    Understandable decision - Toshiba isn't in the market to provide cheap memory chips at their loss.
  • 0 Hide
    garbin , July 31, 2012 6:36 AM
    high prices chips at their loss the market. i like the kingston and adata.