Flash Memory Market Declines in 2012

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According to a recent IHS iSuppli report, the total flash memory market has seen some decline thus far in 2012. That news comes as a surprise to many people, considering the overwhelming increase in popularity and recognition of the role flash memory plays for many users – desktop and notebook SSDs, and tablet and phone storage.

Revenue for the market as a whole is expected to be down close to 5% by the end of this year, from $25.5 billion last year to $24.3 billion this year.

It’s thought that the decrease in worldwide revenue is not due to any drop in demand – far from it – but rather a larger than expected erosion in the pricing of NAND flash memory. NAND flash is the sort of flash memory used in SSDs and mobile device storage. Despite the drop in pricing, it doesn’t mean that flash manufacturers are actually making less money; in fact, it’s possible that their profits are up, even as the overall pricing structure is lowered.

Other problems with the market stem from the flagging popularity of NOR flash. NOR flash is a lower-performing memory product used in very low-cost smartphones and regular cell phones, as well as other storage products (think ROM) that don’t require common or high-speed access. The NOR revenue forecast shows that this segment of the industry is down almost five percent from just last quarter, and down over 28% from the same quarter a year ago.

iSuppli noted that it doesn’t look good for NOR, either – nowadays, NAND flash has advanced to the point in the wireless sector where it can emulate NOR capabilities, and offer competing functionality for a lower overall cost.

Analysts expect the market to pick back up next year, despite the price erosion, thanks to booming market growth in the flash industry as a whole. In four years, the market is expected to be worth over $33 billion, or roughly growing by 5% every year.

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