Mark LaPedus

EE Times

(05/05/2005 6:21 PM EDT)

SAN JOSE, Calif. — Contrary to a report from a research firm this week, the NOR-based flash-memory market is not suffering from a ``supply-demand`` problem, but rather from inroads made by competitive NAND vendors in the arena, according to an analyst.

Paul Leming, an analyst with Princeton Tech Research (Princeton Junction, N.J.), dismissed Semico Research Corp.`s assertions that the decline in the NOR-based flash-memory market is ``the simple result of a supply-demand imbalance which will correct itself in 2006.``

According to a report from Semico (Phoenix, Ariz.) this week, the recovery of the NOR flash-memory market from the current period of declining revenues will see the market achieve record-breaking revenues approaching $11 billion in 2006. However, in 2005, the NOR flash market will contract by 7 percent compared with 2004, the market research company said.

However, in addition to possible supply-demand issues, industry data ``suggests that NAND flash is eating into the NOR flash market,`` Leming said in a report on Thursday (May 5).

``In spite of solid growth in NOR flash end markets over the last year, unit shipments of NOR flash have actually declined over the last three quarters,`` Leming said. ``The problems in the NOR flash market are not just an excess of supply — the NOR flash market is also facing serious demand problems as NAND flash nibbles away at traditional NOR flash applications.``

Traditionally, the two main flash-memory technologies supported different and separate tasks: NAND is geared for data applications, while NOR handled the code-storage functions. But now, there appears to be a collision course between NAND and NOR, especially in high-end, camera-based cellular phones and other products, according to analysts.

Current 2G and 3G cell phones use NOR-based flash memories for code and limited data storage functions. NAND has dominated the digital-camera, MP3 player, and USB markets, but the technology is still in its infancy in cellular phones.

In recent times, NOR proponents like Intel Corp. and Spansion LLC have separately announced technologies and products that claim to compete against NAND-based devices for storage sockets.

Chip makers have developed several memory technologies — such as cellular RAM and mobile SDRAM — to support NAND-based designs. And a software technology called ``demand paging`` for NAND-based designs is also making its way in the marketplace,

NAND vs. NOR

In any case, NOR appears to be on the decline. Shipments of NOR-based flash-memory devices in the first quarter of 2005 were 3 percent below the second quarter of 2004. In comparison, shipments of cellular phones jump 11 percent in the same period, he said.

Worldwide sales for the NAND-based flash-memory market were $781.4 million for March, up 23.7 percent from the previous month and up 27.1 percent over the like period a year ago, according to recent statistics from the WSTS.

Total unit shipments for the NAND-based flash-memory market were 89.8 million in March, up 23.8 percent from the previous month and up 75.6 percent over the like period a year ago, according to WSTS.

Average selling prices (ASPs) for the NAND-based flash-memory market were $8.70 in March, down 0.1 percent from the previous month and down 27.6 percent over the like period a year ago, according to WSTS.

On a three-month rolling average, sales for the NAND-based flash-memory market were $691.3 million for March, up 14.3 percent from the previous month and up 24.5 percent over the like period a year ago, according to WSTS.

On a three-month rolling average, unit shipments for the NAND-based flash-memory market were 79.4 million in March, up 14.2 percent from the previous month and up 66 percent over the like period a year ago, according to recent statistics from the WSTS.

On a three-month average, ASPs for the NAND-based flash-memory market were $8.71 in March, up 0.1 percent from the previous month and down 24.5 percent over the like period a year ago, according to WSTS.

The story is a bit different for NOR. Sales for the NOR-based flash-memory market were $818.8 million for March, up 40.3 percent from the previous month but down 13.8 percent over the like period a year ago, according to recent statistics from the WSTS.

Unit shipments for the NOR-based flash-memory market were 291.2 million in March, up 49.5 percent from the previous month and up 7.1 percent over the like period a year ago, according to WSTS.

ASPs for the NOR-based flash-memory market were $2.81 in March, down 6.1 percent from the previous month and down 19.5 percent over the like period a year ago, according to WSTS.

On a three-month rolling average, sales for the NOR-based flash-memory market were $662.9 million for March, down 8 percent from the previous month and down 11.5 percent over the like period a year ago, according to recent statistics from the WSTS.

On a three-month rolling average, unit shipments for the NOR-based flash-memory market were 206.9 million in March, down 3.3 percent from the previous month and down 5 percent over the like period a year ago, according to recent statistics from the WSTS.

On a three-month average, ASPs for the NAND-based flash-memory market were $3.16 in March, down 6.9 percent from the previous month and down 4.9 percent over the like period a year ago, according to recent statistics from the WSTS.