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NOR flash demand to drop as cell phones favour NAND

Posted: 26 Feb 2013 ?? ?Print Version ?Bookmark and Share

Keywords:NOR flash? NAND? cell phone? Serial Peripheral Interface?

According to the latest data from IHS, the NOR flash market memory is again set to decrease in 2013 and in 2014, marking an extended three-year contraction for the segment. This is attributed to the shift of preference to alternative NAND solutions by cell phone makers, emphasized the market research firm.

Global NOR flash memory market revenue this year is seen to drop to $3.40 billion, down two per cent from $3.47 billion last year and from $4.34 billion in 2011. Revenue will contract a further five per cent next year before starting to pick up in 2015 and 2016. The projected fall this year follows a 20 per cent decline in 2012.

"NORironicallyis turning out to be its own worst enemy in its traditional stronghold of cell phones," said Ryan Chien, analyst for memory and storage at IHS. "Following the path blazed by low-end handsets, feature phones are switching away from parallel NOR and towards cheaper serial NOR. With the feature phone market representing 42 per cent of cell phone shipments in 2012, NOR is facing a tough road ahead. However, new applications for NOR eventually will stop the market's decline."

NOR sales also are suffering because of dwindling demand from PCs, another historically strong market for the memory.

Amid declining sales in cell phones and PCs, top NOR suppliers such as Micron Technology and Spansion in 2012 accelerated their efforts to diversify their sales into new segments like home automation and automotive infotainment. But while offering better growth prospects, these segments are much smaller than the cell phone market.

Because of this, revenue derived from the use of NOR in cell phones and PCs fell more rapidly than increases could be found in the growing industrial and automotive segments.

The overall decline in NOR revenue was also due to the loss of market share suffered by higher-cost parallel NOR. Gains were made instead by the low-powerand more economicalSerial Peripheral Interface (SPI) NOR segment, which ate into overall revenue.

For Micron Technology, NOR sales proved disappointing, tempered only by some positive signs that mitigated the depressed results. The Idaho-based manufacturer reported a six per cent drop in NOR revenue in its November quarter to about $220 million, down sharply from $380 million in 1Q11. Customer demand remained weak, and many NOR customers continued to transition towards NAND.

Moreover, the company did not deny rumours swirling around the sale or closure of its NOR fab in Israel. Such a move would be prudent, IHS added, given the internal shift by the company to phase-change memory, which has the potential to displace applications using NOR flash and is increasingly part of Micron's wireless portfolio.

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