Strong demand means NAND will surpass NOR
James Carbone -- Purchasing, 2/19/2004 2:00:00 AM
The flash memory market will skyrocket over the next several years as nonvolatile flash memory gets designed into more equipment.
The flash market including NOR and NAND flash will grow 39% to $15.4 billion in 2004, according to market intelligence provider iSuppli. Total flash unit shipments will reach 2.98 billion in 2004, up 22.6% from 2.4 billion in 2003, iSuppli predicts.
Buyers can expect the average price for flash to increase from $4.57 in 2003 to $5.19 in 2004, according to Betsy Van Hees, principal analyst with iSuppli. Part of the reason for the price increase is that more higher density flash chips will ship. Higher density chips have more functionality and carry higher pricetags.
Most flash shipped is NOR, which is used for code storage. NOR accounted for 66% of flash revenue in 2003. NAND flash is used for data storage and accounted for 34% of the market.
However, in the next few years, NAND will overtake NOR as the dominant flash technology. In 2004 NOR will represent 58% of the market and NAND will account for 42%. By 2007, NAND will account for 57% of the market while NOR will represent 43% of the $24.7 billion 2007 flash memory market. Driving NOR flash demand: mobile handsets, set-top boxes, DVD players and other consumer products.
Buyers can expect upward price pressure for NOR flash. Inventories are low and leadtimes are stretching. However, price increases should be short lived, most likely ending by the second quarter.
More wafer starts were begun in the fourth quarter of 2003 and that will alleviate supply tightness in late February and March, says Van Hees. Buyers can expect continued supply tightness for NAND flash.
Samsung, Toshiba, Renesas, and SanDisk remain on allocation. NAND pricing could rise in the first quarter. However, supply tightness could ease when Hynix begins production in the second quarter.
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