Apple's (AAPL) iPhone 7 launch, expected in September, will temporarily halt Nand flash-memory pricing declines, but prices could dip again as an influx of 3D Nand capacity exceeds flash-memory demand, Robert Maire, president of Semiconductor Advisors, said late Monday.
Moore's Law has unrelentingly chipped at Nand prices, Maire wrote in a research note, of the Intel (INTC) co-founder's often-used rule that chips double in complexity every 18 months to two years. But unlike DRAM (dynamic random-access memory), Nand demand has continually absorbed pricing pressures. DRAM, on the other hand, has "hit the wall," Maire says.
That could spell danger for America's biggest DRAM supplier, Micron Technology (MU), and will hurt any Nand supplier that hasn't made the leap from 2D Nand, he says.
But the iPhone 7 could increase its use of Nand and DRAM vs. the iPhone 6S, Maire wrote. The 7 will reportedly sport up to 256 gigabytes of Nand memory and, with the potential for more DRAM, it "will be a laptop-class machine in a handheld size," he said.
Smartphones and tablets drove Nand demand in the past, but now solid-state drives (SSDs, or flash drives) are "throwing gasoline on the bonfire of Nand demand and pricing," Maire says.
"Doing the math in the Apple Store, it's clear that Apple makes about 90% of gross margin on upgrading SSDs from baseline," Maire wrote. "Given the current price curve of Nand memory, we will hit price parity with rotating media in the not too distant future."
Rotating media, or hard-disk drives, is still cheaper than SSDs, but 3D Nand will close that gap and generate another surge in Nand demand as laptops turn in their HDDs for SSDs, he wrote. Eventually, though, Intel and Micron's 3D XPoint could be the death knell for 3D Nand, he says.
But Maire estimates it will take five to 10 years for 3D XPoint to "dent the monster of Nand."
Micron stock finished 1.9% higher on the stock market today, and Intel stock rose 0.6%.
