By Mayumi Negishi and Rhee So-eui - Analysis
TOKYO (Reuters) - Japan's Toshiba Corp (6502.T: Quote, Profile, Research, Stock Buzz), fresh off a losing format battle for high-definition DVDs, is now training its sights on the NAND memory chip sector, targeting the No. 1 spot in the potentially lucrative market for new laptops which will increasingly use storage based on flash memory.
The timing is opportune, since the current leader in NAND and the world's biggest maker of memory chips, Samsung Electronics Co (005930.KS: Quote, Profile, Research, Stock Buzz), is busy pouring resources into wiping out the opposition in the dynamic random access memory (DRAM) market.
Toshiba, the world's No. 2 NAND maker, is also in a good position to make its bid for the top as third-ranked Hynix Semiconductor Inc (000660.KS: Quote, Profile, Research, Stock Buzz) has cut output, and as an Intel-Micron (INTC.O: Quote, Profile, Research, Stock Buzz) (MU.N: Quote, Profile, Research, Stock Buzz) joint venture in Singapore has run into a six-month delay before it can start production.
Toshiba, with partner SanDisk Corp (SNDK.O: Quote, Profile, Research, Stock Buzz), has long coveted the NAND crown, which would give it early access to, and even some control over, new product launches by major NAND buyers.
Solid state drives (SSDs), which use NAND, are seen as the next replacement to hard drives. SSDs consume less power, generate less heat, boot up faster, and have longer battery life than existing hard drives, and have been used in a new crop of sleek laptops, such as Apple Inc's (AAPL.O: Quote, Profile, Research, Stock Buzz) MacBook Air and Lenovo's (0992.HK: Quote, Profile, Research, Stock Buzz) X300.
"It's not a matter of waiting for demand for NAND to double. We will make demand double by offering SSDs at a more attractive price than Samsung or Hynix," Toshiba Corporate Senior Vice President Shozo Saito told the Reuters Global Technology, Media and Telecoms Summit.
Toshiba plans to build two NAND flash memory factories in 2010, aiming to catapult production capacity to a potential 810,000 wafers a month, more than triple current capacity.
But analysts warn this strategy might cause Samsung to aggressively defend its No. 1 position, which may result in a supply glut for the rest of the year. Continued...
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