NAND Flash Revenue to Reach $23.1 Billion in 2013 - IHS

Buoyed by proliferating usage in devices like mobile handsets, gaming consoles and hybrid storage drives, the market for NAND flash memory is headed for robust double-digit growth this year after a challenging first half in 2012, according to a Flash Dynamics market brief from information and analytics provider IHS iSuppli.

NAND revenue this year is forecast to reach $23.1 billion, up a stalwart 14% from $20.2 billion last year. Three of the four quarters in 2013 will each pull in revenue north of $5.6 billion, with only the second quarter turning in slightly lower results of $5.5 billion.

In comparison, only two quarters in 2012 surpassed the $5 billion mark, with the highest takings occurring in the fourth quarter as the year came to a close, hitting $5.6 billion.

This means that the highest-grossing quarter in 2012 will be outperformed three times this year, showing how much the market is slated to grow in 2013. Already, the first half this year is larger than the same six-month period in 2012 by 15%.

The NAND application picture continues to broaden as the influence of mobile devices deepens in segments like computing and consumer electronics. The IHS NAND index measuring the pricing trend of mainstream NAND chip densities now sits at 945, its highest level since September 2011, indicating the strengthening of price in recent months. The recent run-up in the ASP of NAND, in turn, is the result of conservative bit growth and healthy consumer demand. Such variables overall are leading to a market opportunity for NAND that is more promising than ever, IHS believes.

The prominence of flash in handsets and tablets continues despite headwinds from stronger NAND pricing and streaming media. In particular, 'OS' creep is increasingly affecting smartphones, demonstrated by the combination of Android 4.2 and the TouchWiz interface of Samsung Galaxy S4 handsets, resulting in the phone consuming an extra gigabyte compared to the predecessor S III model.

Increased flash memory use is also apparent in new hybrid HDDs. One such product from HDD maker Western Digital incorporates a 24GB NAND cache from memory manufacturer SanDisk, blurring the line with cache SSDs used alongside HDDs as an alternative form of storage.

Likewise utilizing more NAND flash are next-generation consoles and other consumer electronics devices. For instance, while employing HDDs in their PlayStation and Xbox gaming consoles, Sony and Microsoft will also feature options for USB storage and possibly embedded flash. Meanwhile, Roku's streaming devices, the 8GB gaming console from Ouya and Nvidia's 16GB Shield handheld gaming system will all be dependent on more flash storage as well as on microSD cards to supply even greater amounts of memory.

A future storage driver is the so-called light-field photography popularized by Lytro, in which pictures consume roughly 60 times the bits of comparable JPEGs to deliver superior image-processing capabilities.

All told, NAND usage in consumer electronics continues to deepen despite struggles in some niche card segments with limited practical value-add, such as Wi-Fi connectivity or in troubled Sony gaming formats like the PlayStation Vita.

NAND flash is also hedging bets in the future too, preparing for a 3-D transition in an attempt to extend its road map.

In SSDs, manufacturers will gradually replace TLC NAND with 3D MLC flash starting early next year, in hopes of maintaining the price-erosion trajectory over the long term for mobile and compute platforms. Older lithographies will be utilized for 3D, saving investment and depreciation expenses.