Once one of the fastest-growing segments of the global semiconductor industry, the NAND-type flash memory market has been stricken by weakening consumer spending, causing revenue to decline in both 2008 and 2009, according to iSuppli Corp. iSuppli's revised forecast predicts that worldwide NAND flash memory revenue will fall by 14 percent to the $12 billion level in 2008, down from $13.9 billion in 2007. In 2009, global NAND flash memory revenue will decline by another 15 percent. iSuppli's previous forecast, issued in the third quarter, called for a 3 percent decline in 2008 and 12 percent growth in 2009.
The year 2008 will mark the first time that worldwide NAND flash revenue has declined on an annual basis.
This represents a major reversal of fortune for a product whose revenue routinely expanded by triple-digit percentages in the late 1990s and early 2000s, and that as recently as 2005 generated 62.2 percent annual growth. The biggest challenge is the nature of the applications that drive sales of NAND flash memory. Applications including Personal Media Players (PMPs), flash memory storage cards and USB flash drives account for almost 80 percent of total NAND chip demand.
"Unlike other memories, which depend more on non-consumer/non-retail products, NAND flash is bearing the brunt of the challenging retail conditions," said Nam Hyung Kim, Chief Analyst at iSuppli. "Combined with uncertain global economic conditions and a lack of killer applications, the NAND flash memory business is facing a triple whammy.
Decreasing unit growth in the NAND flash market potentially will impact the semiconductor capital equipment industry. The NAND flash suppliers have been increasing their capital spending to increase their capacities. However, industry spending will be reduced significantly by 38 percent in 2009.
All in all, the only winners in this market are and will be consumers who have access to fire-sale prices for these flash storage devices due to those issues.
For more information, visit www.isuppli.com.