In a first, NAND flash attains revenue parity with NOR

Paul Boughton

NAND-type flash reached a major milestone in the first quarter of 2005 as its shipment revenue grew to be roughly equivalent to that of NOR-type flash-the first time in the history of the flash market this has occurred.

Revenue for NAND flash in the first quarter rose to US$2.05billion, up 16percent from the fourth quarter of 2004, according to preliminary data from iSuppli Corp. In contrast, NOR flash revenue declined to US$2.02billion, down 11percent from the fourth quarter. This put revenue for the two types of flash in a state of virtual parity during the quarter.

"Since the inception of the market, NOR has been the predominant form of flash memory, with its sales routinely dwarfing those of the newer NAND," said Mark DeVoss, senior analyst, covering flash memory for iSuppli.

"For example, NOR accounted for 91percent of overall flash memory revenue in 2000, compared to just 9percent for NAND. However, since 2002, sales have boomed for NAND flash, due to its extensive use for data storage in fast-growing products like MP3 players, digital still cameras, memory cards and USB drives.

"Meanwhile, growth in the NOR market has been relatively weak as cutthroat competitive conditions have driven down Average Selling Prices (ASPs)," DeVoss added. "NOR flash is used primarily for code storage in mobile phones, an area that has experienced relatively slow growth compared with the products where NAND is employed."

With sales of products using NAND flash continuing to boom, this trend will continue, iSuppli predicts.

In 2006, iSuppli forecasts NAND will account for 59percent of overall lash-memory revenue, compared to 41percent for NOR. In 2009, NAND will account for 65percent of all flash revenue, compared to 35percent for NOR.

The top-two players in the NAND flash market, Samsung Electronics Co Ltd and Toshiba Corp, easily retained their ranks in the first quarter, with market shares of 58.5percent and 24.2percent respectively, according to iSuppli's preliminary estimate.

The real news in NAND flash was the strong performance by some relative newcomers to the market: Hynix, Infineon, Micron and STMicroelectronics. Number-five supplier Infineon Technologies AG achieved market-leading growth, with its first-quarter NAND sales rising a whopping 230percent compared with the fourth quarter to reach US$33million.

Seventh-ranked Micron Technology Inc. attained growth of 200 per cent. Number-six player STMicroelectronics expanded its sales by 42.9percent and fourth-placed Hynix Semiconductor Inc grew its NAND revenue by 37percent.

Despite these advances, all four companies still have only single-digit market shares and thus have a long way to go before they can challenge the industry leaders.

Intel Corp retained the top ranking in NOR for the third consecutive quarter, according to iSuppli's preliminary ranking. The company has been engaged in a close competition with rival Spansion for NOR leadership over the past few years.

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