After five consecutive quarters of sequential expansion due to strong demand and short supplies, global revenue from shipments of NAND-type flash memory declined to $4.1 billion in the second quarter, down 6.5 percent from $4.3 billion in the first quarter. After the second quarter dip, however, the NAND flash market is set to return to sequential growth for the next five quarters.
Fig. 1 presents iSuppli’s estimate and forecast of quarterly global NAND flash revenue.
Source: iSuppli, USA.The 3-bit-per-cell (TLC) flash parts represent the latest technological development in the NAND market, allowing the storage of three bits of information in each memory cell, tripling the density of a given flash device.
This type of NAND has enjoyed strong acceptance in memory cards and USB drives. In comparison, the other large consumers of NAND—embedded applications and mobile communications—use 2-bit-per-cell Multilevel Cell (MLC) and 1-bit-per-cell Single Level Cell (SLC) flash.
“The NAND flash market is officially on a winning streak, amid strong demand and short supplies,” said Michael Yang, manager of memory/storage systems, for iSuppli. “However, soaring production of TLC parts has resulted in these parts going into oversupply, causing prices to decline and bringing down revenue for the entire NAND market in the second quarter.”
The oversupply situation spurred a sharp decline in pricing for TLC NAND. Pricing for TLC and MLC flash was nearly at parity in January, but by the end of June, TLC’s pricing fell far below that of MLC as shown in Fig. 2.
Source: iSuppli, USA.NAND interrupted
Despite the second-quarter hiccup, iSuppli expects global NAND revenue to rise by 32 percent for the entire year of 2010 to reach a record $17.9 billion. However, the oversupply problems are limited to TLC and are likely to be short lived.
In the second half, supply and demand for the TLC NAND will be more balanced as demand for USB and cards increase during the holiday seasons. There will be a continued shortage of MLC NAND as smart phones and tablets sees sustained demand from consumers.
One major factor driving the robust demand for NAND flash is rising demand from smart phones, a phenomenon spurred by Apple Inc.’s iPhone.
“Apple has set the benchmark with its wildly popular iPhones and the rest of the industry is more or less resigned to play catch-up,”
Yang said. “One hallmark of the iPhone feature set is embedded storage: equipped with up to 32Gbytes of flash memory, consumers are no longer hindered by what they can load onto the device—be it music, videos, emails with attachments, or as many apps as one can download. The surge in storage requirements among smart phones alone has pushed average flash memory density in such products to grow by 317 percent to 1.3Gbyte in 2010."
Source: iSuppli, USA.
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