The Apple iPad, competing tablets and continually increasing smartphone use are all driving demand for NAND flash memory, says iSuppli, adding a warning about overproduction.
The Apple iPad, the invigorated tablet market and increasing rates
of smartphone adoption are all driving the NAND flash memory market
toward record revenues, research firm iSuppli reported Nov. 16.
With supply ramping up in the latter half of this year and into
2011, iSuppli analysts expect the NAND flash segment to continue to see
strong sales, though suppliers will need to "walk a fine line" as the
industry moves to 2x-nanometer and more advanced semiconductor
manufacturing processes toward year's end, iSuppli warned.
Revenue for NAND flash memory in 2010 is now expected to reach $18.7
billion, up 38 percent from last year's $13.5 billion. Going forward,
growth will continue though the pace will lessen slightly, with revenue
expected to reach $22 million in 2011 and climb to $24.4 million in
"The higher NAND revenue is reflected as well in a parallel upsurge
of bit growth, soaring a mighty 71 percent to 10 billion gigabytes in
2010, with a substantial portion of the expansion due to die shrinks
and production of 3-bit-per-cell TLC memory," iSuppli reported. Over
the next two years, however, average selling prices (ASPs) are expected
to decline slightly and, as the NAND market is pressed to produce,
over-production may eventually hurt it.
With planned fabs from Samsung, Toshiba and the Intel-Micron joint
venture, IMFT, adding another 70 percent increase in production in
2011, the risk of oversupply is strong, iSuppli analysts warn. Should
suppliers fail to prudently manage their production mix, the resulting
capacity could "send the market into a tailspin," according to the
"Among consumer electronic devices, tablets represent the newest
growth sector for NAND flash, in addition to the memory product's
continued healthy application and usage in smartphones," iSuppli senior
analyst Michael Yang said in a statement. "The mad rush for NAND flash
in tablets echoes a similar trend in netbooks two years ago, but is
occurring on a larger scale, iSuppli believes, given the high average
densities used in tablets."
Tablets, led by the Apple iPad, are expected to consume NAND flash
at a rate of 1.7 billion gigabytes in 2011, up from just 428 million
gigabytes in 2010. The iPad is expected to have the highest average
NAND flash density of any tablet, likely reaching 52.5GB in 2012. And
while 30 tablets are expected to become available from various major
brands in the fourth quarter, iSuppli expects the iPad to continue to
dominate "for some time to come."
While, again, such growth will push the demand for NAND memory
higher, manufacturers will need to balance the need to reduce
production costs with growing supplies.
"Should seasonal demand in the second half of the year-and
beyond-not shape up to expectations, oversupply and other expenditures
could sink an otherwise resilient market and push NAND memory toward a
downturn," states the report.
Research firm ABI recently increased its forecast for tablet
shipments in 2010 to 11 million units. In the third quarter alone,
according to Strategy Analytics, 4.4 million tablets shipped, 95.5
percent of which were the Apple iPad.
Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.