Feature Article

February 25, 2013

As Cell Phones Favor NAND, NOR Flash Market Continues to Decline

As more segments of the cell phone markets drop NOR Flash memory in favor of alternative NAND solutions, the NOR flash memory market is forecasted to shrink again in 2013 and 2014, according to information and analytics provider IHS iSuppli’s Flash dynamics market brief. Consequently, the global NOR flash memory market revenue in 2013 is expected to dip to $3.40 billion, down 2 percent from $3.47 billion last year and from $4.34 billion in 2011. These results were reported by EFYTimes.com.

Likewise, the study indicates that NOR revenue will shrink further by 5 percent next year before starting to pick up in 2015 and 2016. The projected fall this year follows a 20 percent decline in 2012, marking an extended three-year contraction for the memory, said the IHS report.

In a statement, Ryan Chien, analyst for memory and storage at HIS, said, “NOR—ironically--is turning out to be its own worst enemy in its traditional stronghold of cell phones . . . Following the path blazed by low-end handsets, feature phones are switching away from parallel NOR and toward cheaper serial NOR. With the feature phone market representing 42 percent 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,” added Chien.

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

To counter these falls, key NOR suppliers like Micron Technology and Spansion have diversified their sales into new segments like home automation and automotive infotainment. Although, these markets offer better growth prospects, they are much smaller than the cell phone market.

Meanwhile, the report suggests that the company is planning to sell its NOR fab in Israel. According to IHS, such a move would be prudent. Also, the memory maker is shifting to phase-change memory, which has the potential to displace applications using NOR flash and is increasingly part of Micron’s wireless portfolio.

Despite falling revenues, Micron’s performance was satisfactory due to cost cuts and rising average selling prices, which the manufacturer believes will continue in the first quarter this year as its 45-nanometer process and 300-millimeter wafers for NOR near production. Also, Micron’s revenue in the embedded memory segment was down 2 percent, operating income jumped 10 percent, reflecting the more favorable margin situation. Meanwhile, wireless revenue rose 15 percent, and operating losses narrowed by 20 percent.

The IHS report shows NOR industry is now enlarging its footprint in key growth segments like automotive and home automation, with applications such as vehicle engine control, temperature sensors, smart meters, and home security systems.

Edited by Rich Steeves

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