Semiconductor Equipment - Berenberg Bank

Semiconductor Equipment
Technology Hardware
Toshiba and Micron are ramping up capacity slower than before, Samsung
switched its NAND line 14 to LSI and has been converting its NAND production
capacity in Austin, Texas since Q2 2012 to LSI (logic), and SK Hynix readjusted
Fab M12’s capacity to produce both DRAM and NAND instead of being a
dedicated NAND fab.
Figure 10: NAND demand/supply
Mns of 1GB Eqv 2010 2011 2012 2013E 2014E
Demand/Supply
NAND demand 11,295 20,195 32,131 45,872 62,992
Growth 65.7% 78.8% 59.1% 42.8% 37.3%
NAND supply 11,247 20,004 31,946 44,318 62,966
Growth 72.5% 77.9% 62.1% 38.7% 42.1%
ASP ($) 1.86 1.24 0.74 0.62 0.48
Sufficiency 99.6% 99.1% 100.9% 96.7% 100.0%
By Application
Tablets 4.5% 8.5% 7.3% 5.3% 6.1%
PC 0.2% 0.2% 0.6% 1.3% 2.0%
Server 0.1% 0.1% 0.1% 0.1% 0.1%
Feature phone & sm 20.2% 22.3% 22.2% 21.5% 19.2%
SSD 6.7% 12.8% 19.4% 29.2% 35.0%
Data Card 46.5% 38.5% 32.9% 26.2% 23.6%
Other 21.8% 17.6% 17.4% 16.4% 14.0%
Source: Gartner data, Berenberg estimates
We expect NAND bit shipments to grow at a modest level (40-50%) over the next
three years (see Figure 10 above), mainly driven by demand for Solid State Drive
(SSD) and, to a lesser extent, smartphones and tablets. The main portion of bit
growth (40%) will come from node shrinking (more chips can be made from the
same wafer as chip size shrinks); therefore, wafer capacity addition is likely to grow
at a very low level.
Figure 11: NAND content/box
(GB Eqv) 2010 2011 2012 2013E 2014E 2015E 2016E
Tablet 27.2 25.4 15.7 11.6 14.8 17.7 21.5
Growth 100% -7% -38% -26% 28% 19% 22%
Smartphone & Feature phones 1.4 2.5 3.9 5.1 6.3 8.8 12.6
Growth 70% 73% 61% 30% 23% 39% 43%
Solid State Drives (SSD) 77.3 98.8 148.6 170.4 190.9 223.1 265.0
Growth 35% 28% 50% 15% 12% 17% 19%
Data Cards 1.1 1.4 1.8 2.0 2.5 1.7 1.9
Growth 27% 34% 22% 15% 22% -32% 13%
Source: Gartner data, Berenberg estimates
We believe NAND vendors are unlikely to invest heavily in capacity additions in
the near future because: 1) Samsung’s new mega NAND fab and Micron’s DRAM
to NAND conversion will add new capacity in the next two years; 2) we estimate
that the growth of smartphones and tablets will be driven by mid-/low-end
products with low NAND content per box.
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