NOR flash revenue set to grow in 2010
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Buoyed by improved demand and a brightening macroeconomic environment, NOR flash memory market revenue is projected to return to growth in 2010, according to market analyst iSuppli.
According to iSuppli, revenue for NOR flash memory is projected to climb 4.2%, rising to $4.8billion this year from $4.6bn in 2009.
The embedded NOR flash market accounts for 83% of all NOR shipments, at 3.3bn units in 2010. iSuppli projects unit shipments of NOR flash parts for the embedded market will grow at a 5.3% percent compound annual growth rate through 2014, while the cell phone segment will shrink due to the rising penetration of rival NAND flash memory technology.
Michael Yang, senior analyst for iSuppli believes that within the embedded NOR segment, the PC market will constitute over 50% of units. Given that more than five NOR parts are needed for every computer system, and in light of projections showing the PC market expanding 16% this year, Yang forecasts that the NOR flash market can expect upgraded prospects in 2010 compared to generally depressed results last year.
Yang said: "While iSuppli's NOR revenue forecast is in line with previous projections showing a healthier 2010, the earlier-than-expected upturn of the market has caught flash makers off guard. "Following the recession, companies cautiously started carrying leaner inventories to minimise bloated stock. The sudden, early upsurge in NOR demand—an expansion that started in the second half of 2009 and that has continued since then—has left suppliers scrambling to fulfill orders. And despite capacity increases and close-to-maximum fab utilisation levels among NOR suppliers, lead times have ballooned for clients awaiting product."
According to Yang, the net effect of such developments has been to prolong the strength of chip pricing, with average selling prices projected to hold steady for the rest of the year.
"The NOR market also is wary of its heavy reliance of the industry on PC product shipments for growth. But thanks to its utility, low unit pricing and specific advantages in functionality, NOR seems assured of remaining as a key segment in the flash memory industry for years to come," Yang concluded.
