NAND chips may slip in price

By Tom Stundza -- Purchasing, 12/20/2006 6:40:00 AM

The likelihood of an inventory oversupply and subsequent price deterioration in the first quarter looms large over the NAND flash market, suggests analyst Kimberly DuBord at Briefing.com. Like any commodity-type product, flash pricing rests on supply/demand metrics. And as the demand side of the equation continues to grow, global semiconductor companies have been ramping production. “All this supply has increased industry-wide pricing concerns heading into the seasonally weak first quarter,” DuBord writes.

Flash is a type of non-volatile memory that can be electronically erased and reprogrammed. NAND flash has become the memory of choice due to its high density, low cost, fast write times, and long re-write life expectancy as a semiconductor device that retains memory content when power is turned off. The market for NAND flash is expected to grow rapidly over the next few years.

In 2005, the NAND market was roughly $11 billion. Gartner projects a compounded annual growth of 30% over the next three years, reaching $25 billion by 2008. The Semiconductor Industry Association (SIA) predicts less robust compounded annual growth of 11% through 2009. It does, however, estimate that laptop computers with pure NAND drives will account for up to a quarter of the laptop market by 2009.