NOR prices will keep falling
The buyer’s market for NOR flash will continue as flash capacity is plentiful
By Jim Carbone -- Purchasing, 10/2/2008 7:45:00 PM
Electronics buyers can expect NOR flash memory prices to drop for the rest of this year, although bit demand will grow about 17% in 2008.
Falling prices mean that the global NOR flash memory market will drop about 10% from $7.7 billion in 2007 to $7 billion in 2008. Price erosion will continue in 2009, albeit at a slower rate, and the NOR market will fall to about $6.8 billion.
The average price of a NOR flash memory chip will drop about 14% in 2008 from about $2.03 in 2007 to $1.72. In 2009, the price will be about $1.60.
“Right now we are in oversupply,” says YG Han, vice president of segment marketing, SST, Inc. in Sunnyvale, Calif., a fabless flash memory supplier that provides NOR for a wide variety of electronics equipment. “It’s been a buyer’s market for three years.”
Prices will continue to fall although there will be a transition to higher density devices which usually have higher prices than previous generation densities.
The price decline will occur although unit shipments will rise by about 4% and bit shipments will increase 17% on 2008. NOR is used in a variety of equipment, such as cell phones, computers, MP3 players, video game consoles, set top boxes and other devices for code storage.
“There is tremendous pressure on prices because of excess capacity and better efficiencies in manufacturing,” says Brian Matas, vice president of research for IC Insights in Scottsdale, Ariz.
Capacity has increased, not because suppliers are building new fabs, but because they are transitioning to more efficient process technologies and, in some cases, 300mm wafers. Those changes result in more usable chips per wafer, says Matas. For instance, Spansion has transitioned its NOR fab in Japan from 90nm process technology to 65nm, says Matas. The fab has also moved to 300mm wafers from 200mm.
Falling prices mean less revenue for NOR suppliers and will result in less capacity investment over the next two years, says Matas.
See also: Look for lower NOR flash prices
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