IC Insights: Conditions Favor Flash Density
The flash memory market is setting up for a dramatic shift in the supply-demand balance -- one that will fuel growth for the NAND flash market through 2012. Bit growth is escalating wildly, yet this does not translate to great increases in capital spending.
Staff -- Semiconductor International, 8/27/2009
For flash memory devices, unit shipments and bit volume demand continue to increase. At the same time, however, there has been a severe reduction in flash memory capital spending. Combined, these two factors will put upward pressure on average selling prices through 2012.
NAND flash memory unit shipments have declined only one year (2001) since IC Insights started tracking this market in 1993. Moreover, flash units are not forecast to decline through 2013 and that includes 2009 with all of its economic challenges. Unit growth has resulted in very strong flash bit volume growth as well. Driven by handheld and wireless consumer, computer and communications devices, flash bit volume increased by triple-digit figures between 2005 and 2008. As difficult as the global economy has been in 2009, NAND flash bit volume is still forecast to increase 83%. Samsung, Micron and other flash manufacturers show no signs of slowing flash bit volume growth in their forecasts. In fact, their roadmaps suggest that bit volume will continue to roughly double each year through 2013.
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Despite a severe reduction in flash memory capital spending, unit shipments and bit volume demand continue to increase. (Source: Micron, IC Insights) |
While unit and bit-volume demand are forecast to escalate,
industry-wide capital spending for NAND flash memory has been severely
curtailed. The figure shows NAND bit volume increasing through 2009 yet total
industry-wide capital spending for NAND flash memory is forecast to decline 73%
in 2009 to only $3.0B (NAND accounts for 99% of total flash bit volume).
Moreover, no significant expansion or capital expenditure spending plans have
been announced for 2010, according to the mid-year update.
With unit demand increasing and a minimal amount of new facilities and upgrades planned, conditions are setting up for average selling prices to move higher through the balance of 2009 and into 2010. In fact, the rise in ASPs could last well into 2012 since it will take some time before new capacity expansions are brought online. This trend, though a potential burden to OEMs, could be a significant blessing for flash suppliers who have seen only steep price declines for their products over the past several years.
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I do not believe that your statement "(NAND accounts for 99% of total flash bit volume)" is accurate, as NOR flash, while declining in popularity, continues to sell in fairly high volumes. I agree with the premise that NAND pricing will likely be stable to higher over the next few years. That may slow down NOR's decline.
Bob Witkow - 8/28/2009 10:42:31 AM CDT
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