Analyst: Flash opportunities “enormous” in cell phones, computers

October 2, 2007 – Slumping ASPs caused by overcapacity, and a migration to higher densities, will cause a 1% dip in the flash memory market this year. But forecasted demand across several applications — notably the computing sector — will drive significant growth for NAND for the next several years, according to IC Insights Inc.

This year NAND unit volume growth has narrowed to 11% growth (6.1B units), with sales down 1% to $19.9 billion, as chipmakers fought off a toxic pricing environment brought on by a surge in global flash capacity.

But this situation will be “short-lived,” the firm says, citing “new and existing applications” that will drive demand into the next decade, particularly in three areas: cell phones, storage cards, and computing (notebooks, desktops, and servers). NAND flash content/system for cell phones is expected to more than double, annually on average, from now to 2010, driven largely by incorporation of mobile-TV capabilities.

Flash memory used in computing applications is seen jumping >5x in just the next four quarters, whether it’s for USB drives or replacing hard-disk drives altogether, the firm says. Many handheld computers already ship with flash memory, and Dell is now shipping flash-based PCs. By 2010 the price/MB of flash should be comparable to that of HDDs, bringing flash-based PCs more into the mainstream.

An upgrade cycle for digital cameras is being spurred by a new generation of low-cost 5/7/10Mpixel resolution units, which should boost average content of flash storage cards for cameras by 59%/year to 3.0GB in 2010, the firm adds.

Other flash content-hungry applications include digital camcorders and TVs with flash-based integrated personal video recorders, the firm notes.

Driven by all this increasing demand, flash shipments should climb another 17% in 2008 (to 7.1B units) and reach 10.2B units by 2011. Flash bit volumes are slowing, but still strong — 219% in 2005, 87% in 2006, and 48% in 2007.


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