Mark LaPedus

EE Times

(04/24/2006 5:27 PM EDT)

NAPA, Calif. — There is not enough wafer fab capacity to meet the future demand for NAND-based flash memories in the worldwide market — if the growth rates continue on its current upward path, warned the top executive at SanDisk Corp.

“Huge capex [will be required] to supply insatiable flash demand,” declared Eli Harari, chairman and chief executive of SanDisk (Sunnyvale, Calif.), during a presentation at the SEMI Strategic Business Conference here on Monday (April 24).

“If the demand continues [over the next five years], the capacity is not in place,” Harari warned.

His overall fab capacity projections are based on SanDisk’s staggering growth. The flash-memory card maker grew 195 percent in terms of overall bits from 1999 to 2005.

And the company’s growth does not appear to be slowing down. Recently,Toshiba Corp. (Toshiba) and SanDisk confirmed that they are planning to build another 300-mm NAND flash wafer fab, known as Fab 4, at Yokkaichi. The plant will be constructed and ramped faster than had been previously reported. Toshiba is SanDisk’s flash partner.

IM Flash, Hynix, Samsung, Toshiba and other vendors are also seeing exploding demand for NAND flash. Vendors are seeing huge demand from MP3 players, USB drives and other products.

Since the beginning of this year, however, prices for NAND flash have fallen off a cliff. But after experiencing severe price declines and a capacity glut, suppliers of NAND-based flash memories are expected to see the first wave of product shortages in the current quarter, according to an analyst.