Total flash memory market to decline in 2012, says IHS

Press release; Jessie Shen, DIGITIMES [Thursday 18 October 2012]

Revenues for the flash memory market are projected to decline to US$24.3 billion in 2012, down 4.7% from US$25.5 billion in 2011, according to IHS iSuppli. The NAND segment is 2012 will account for US$20.8 billion and the NOR sector will make up the remainder at US$3.5 billion.

While 2012's numbers are slightly down from 2011 because of a larger-than-expected erosion in NAND prices, the market will bounce back in 2013 with growth of 11.4%, and then continue to expand at a steady clip, said IHS. By 2016, total flash memory revenues will amount to US$33.3 billion, equivalent to a five-year CAGR of 5.3%, IHS indicated.

"The action in the NOR and NAND flash memory market largely is being driven by mobile handsets," said Michael Yang, senior principal analyst for memory & storage at IHS. "Flash memory growth is due in large part to mobile handsets. With Apple and Samsung leading the way, phones today are constantly being refreshed with the latest features and processors, requiring more powerful memory products, in turn."

NOR, which blossomed in the early years of the handset business, continues to be used in lower-cost handsets, despite ongoing market share losses in its total market to rival NAND, IHS said. NAND flash, meanwhile, is enjoying high demand as consumers migrate to smartphones, in which data storage in the phones takes advantage of NAND cost, scale and die size.

The NOR industry continues to contract, with the latest retreat occurring in the second quarter of 2012. NOR revenues fell to US$837 million, down 4.6% from the previous quarter, and down by 28.2% from the second quarter a year ago, IHS said.

NOR's troubles come from the wireless sector, where it is being squeezed by lower-cost NAND-based solutions emulating NOR capabilities, IHS noted.

Unlike the struggling NOR flash space, the rival NAND flash sector is flourishing despite a temporary setback in 2012 that saw an erosion in ASPs cut into total anticipated revenues, according to IHS.

Source: IHS iSuppli, compiled by Digitimes, October 2012