Tuesday, November 22, 2005

Small gadgets to spark flash-memory surge

Recent deals, such as the Intel and Micron $5.2 billion joint venture, are demonstrating the expected growth for NAND flash memory. CNET News.com writes that the "demand for power-packed consumer gadgets like the iPod and digital cameras is expected to make flash memory a $47 billion market in 2009."

Jim Handy at Semico Research said, "Already the NAND Flash in USB drives has displaced floppy disk drives in PCs for transferring data, especially as density in NAND flash devices increases."

Handy predicted that camcorders will migrate from tape and mini DVDs to NAND flash, with some manufacturers already starting the transition. According to Semico, "NAND flash memory is becoming so popular that it's already outpaced its cousin NOR flash memory in manufacturing sales circles. NAND sales in 2005 are expected to top $10.2 billion this year. NOR flash is expected to pull in $7.6 billion in the same time frame."

Alan Niebel at Web-Feet Research said, "Higher density and higher capacity components will mean cheaper and more available NAND in the long run, at very good prices. We're playing with an unknown demand next year and possibly causing a price war with those consumers who are buying cameras, cell phones and MP3 players. As Intel begins to realize that these partnerships with Apple and others are integrated in the delivery of digital content, the greater success they will have in building their NAND business."

Niebel added that "Right now we have a shortage of NAND on the market, and that will carry over to early 2006. We're expecting the rest of the market to be very competitive in their pricing structure to deal with this new joint venture."

According to iSuppli, "NAND availability has been reduced since Apple debuted its flash-based iPod Nano in September and entered a deal to buy as much as 40 percent of Samsung's NAND output in the second half of 2005. Apple's share of global NAND sales in 2006 could reach as high as 25 percent." in a recent report, iSuppli said, "This deal is particularly positive for small and midsize NAND buyers, which are finding it extremely difficult to source sufficient quantities of NAND chips at this time."