From the AMAT thread
Flattened flash memory market sits at bottom of downturn, says report
Semiconductor Business News
(10/04/01 09:49 a.m. EST)
EL SEGUNDO, Calif.--The worst now appears over in the downfall of flash memory sales. Fourth-quarter flash revenues are expected to be flat with depressed sales in Q3, said researchers at iSuppi Corp. here today.
The El Segundo-based market research firm is now predicting a slight recovery in flash memory markets beginning in the first quarter of 2002. When this year is finished, however, flash chip sales will decline nearly 32% to $7.3 billion after rocketing upwards by 133% last year.
"The exceptional growth in flash memory sales in 2000 was powered primarily by cell phone handset and infrastructure applications, which drove sales of 46% of all devices made," said analyst Betsy Van Hees, who has written a new iSuppli report, called "Flash Memory Service, Weak Economy Shifts Application Market Share for Flash Memory."
"With handset sales actually projected to drop more than 2% in 2001, and acceptance of 2.5G and 3G handsets much slower than originally anticipated, new application areas will lead the flash market outof the abyss in the second half of 2002," she said.
The release of the new flash report comes one day after iSuppli predicted the start of a "slow and jerky recovery" would begin in the fourth quarter for the entire electronics supply chain--semiconductors, passive components, connectors, and other building blocks for systems (see Oct. 3 story). Overall, the research firm is calling for a 5% sequential growth in electronics component growth in Q4 over Q3, but flash will be just sequentially flat in the final three months of 2001, according to the new report.
"While NOR flash will remain in the doldrums for some time, NAND flash is seeing increasing acceptance in some high end applications requiring large amounts of capacity for data storage," said Van Hees. "In fact NAND is beginning to economically push the 1-Gbit storage envelope in these areas.
"NAND suppliers have also been working at increasing device reliability, and have made some inroad for these devices in the cell phone market segment," she said. "And with 3G applications involving streaming media, the higher storage capabilities for NAND flash is sure to pay significant dividends to suppliers during the next few years. In fact, we see NAND flash growing from 11% of the market in 2001 to almost 36% by 2005."
But the iSuppli analyst warns that a few "challenging quarters lie ahead for flash memory manufacturers."
"If the market is not suddenly flooded with new fab capacity, which was planned but delayed by many manufacturers, the stable growth in revenues and slowly rising ASPs [average selling prices] will be the rule for all suppliers in the market," she said. "iSuppli continues to believe that those flash manufacturers who work closely with other system level component suppliers in forming alliances to help their common end customers in the design-in process will significantly increase their overall value propositions and ultimately become the big winners." |
