Menu
Intel feeling pain from low flash memory prices

Intel feeling pain from low flash memory prices

Intel on Monday lowered its gross margin forecast based on lower NAND flash pricing.

Intel has warned that low prices for NAND flash memory chips will have a greater financial impact during the first quarter than company officials had initially anticipated.

NAND flash is a type of memory used as storage for MP3 players and mobile phones, as well as in removable memory cards slotted into digital cameras and other devices.

The lower prices for NAND flash would bring down Intel's expected first-quarter gross margin from 56 per cent, "plus or minus a couple of points", to about 54 per cent, the company said in a statement. The announcement comes ahead of an Intel meeting with investors and financial analysts later this week.

Gross margin reflects the basic profitability of a company's products during a given period before taking into account the cost of running the company and other expenses. It's one of the most important profitability ratios, and managers generally track this number to gauge a company's financial health. Concerns about the economy and consumer spending recently prompted research firm iSuppli to slash its NAND flash revenue forecast for the year.

ISuppli cut its growth prediction for 2008 to between 7 per cent and 9 per cent, down from its earlier projection of 27 per cent. Global NAND revenue in 2007 was $US13.9 billion.

If concerns about the US economy deepen, consumers might reduce spending on phones, MP3 players and the other devices that use NAND flash, weakening demand for the chips and depressing prices, iSuppli director and chief memory analyst, Nam Hyung Kim, said. He predicted prices could fall by as much as 55 per cent this year.

Intel showed strong NAND revenue growth in 2007, growing 269.6 per cent, according to iSuppli. Nevertheless, Intel cited low flash memory prices when its fourth-quarter results, announced in January, fell short of analyst expectations.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Featured

Slideshows

EDGE 2019: Channel forges new partnerships during evening networking

EDGE 2019: Channel forges new partnerships during evening networking

Partners, vendors and distributors reconnected during a number of social gatherings during EDGE 2019. The first evening saw the channel congregate for a welcome party at the Hamilton Island yacht club, while the main poolside proved to be the perfect stop for a barbecue on the final night.

EDGE 2019: Channel forges new partnerships during evening networking
EDGE 2019: Thought leaders share how to build a channel of the future

EDGE 2019: Thought leaders share how to build a channel of the future

Day 2 of EDGE was opened by in-depth research from TRA's Tim Dillon, which outlined the partner view on the channel's future. The following day saw Forrester's Jay McBain and Odgers Berndtson's Tim Sleep conclude the keynote line-up, while HPE and Cisco rounded off the thought leadership.

EDGE 2019: Thought leaders share how to build a channel of the future
Show Comments