A report from In-Stat reckons that the huge surplus in flash memory will see the technology create bridgeheads in both solid state disks and video cameras, in markets growing at 100% a year through 2012.
The simple formula has long been true is that as flash memory gets cheaper and comes in larger and larger storage sizes, it falls in price per GB and opens up new areas where it is economic to use. Today the top markets for the increasingly popular NAND flash are MP3 players and other portable media players, handsets, and USB flash drives. Providing storage in laptops and netbooks, as well as increasing onboard storage on video cameras, have always been good targets for soaking up a lot of over capacity in the flash market.
But the reports is contentious as it claims that the growth in these markets will overcome existing weaknesses brought about by oversupply, and drive overall growth to 30% compound annual growth rate. That’s not what the market has been experiencing during the past year when flash memory has been given away just to keep all the factories open. When major players like Samsung, Toshiba, LG, Hynix and the Intel Micron axis all decided this would be a war to the death, capacity has been driven up, and no prisoners have been taken in flash pricing.
In-Stat also claims that Samsung, Toshiba and Hynix all lost market share in 2007 and that Micron and Intel, which work together, gained share and says that worldwide NAND flash revenues are likely to grow at a compound annual growth rate (CAGR) of 29.7% from 2007’2012 to reach $61 billion. The less popular NOR flash revenues will increase at just 6% by comparison.
Our gut feeling is that while the total number of GB of flash shipped will continue to go up exponentially, the market will only grow in revenue terms when it has shaken out further and seen a few more players consolidated.