NAND flash revenue set to grow again in 2011?

Following the biggest year yet in 2010, when the market climbed 38%, iSuppli forecasts that NAND flash revenue this year will reach $22billion, up 18% from $18.7bn. The rise in revenue is accompanied by an even larger increase in NAND bit growth, projected to soar 72% in 2011 to 19.3billion gigabytes. The market analyst believes that, despite strong growth, a shift in the market could occur by the end of 2011. Michael Yang, iSuppli analyst, said: "Given the optimism currently engulfing the market and the likelihood of overspending on manufacturing on the part of suppliers, risks to the industry could surface by the close of 2011 when supply is likely to surge ahead of demand. A slight downturn is predicted for 2012, after which the market will recover 11% in 2013 and then rise again the year after." According to iSuppli, the flash segment's importance will dwindle in the years to come given the sector's more mature dynamics while the demand for NAND memory shows no signs of letup in the other major segment for sales: embedded applications. "Here, use of the product continues at a fever pitch in popular devices like mobile handsets—particularly smart phones—as well as in the newly energised segment for tablets," said Yang. "Buoyed by the success of Apple's iPad, NAND flash will likely enjoy an explosive year with tablet products from other players such as Samsung Electronics, Dell and Research In Motion." iSuppli expects more challengers to emerge in the embedded NAND market this year, while it believes the key to success in both the embedded and commodity flash memory segments, will lie in the development of controller technology. "Next generation flash memory will require 60bit to 80bit Error Correction Code (ECC) engines, compared to 2bit ECC just four years ago," Yang noted. "To successfully launch next generation memory products, controllers need to be closely coupled—simultaneously developed and readied for the market."