El Segundo, Calif. — The global flash memory market reached $28.8 billion in 2013, up from $23.7 billion in 2012, according to a new report from IHS Technology (NYSE: IHS). While the NAND product segment, known as embedded multimedia card (eMMC) increased revenue by 28 percent, sales of NOR flash fell by 15 percent last year.
The NAND segment tallied record shipments of more than 1 billion units in 2013, up 49 percent from 687 million in 2012, reaching a market value of $25.8 billion, according to the IHS report, “Mobile & Embedded Memory Tracker – Q4 2013.” In comparison, NOR flash shipments fell 10 percent to 606 million units in 2013 with revenue of approximately $3.0 billion.
“The key driver to NAND lies in its proliferating use for mobile consumer electronics, exemplified by the memory’s increasingly widespread application in devices like smartphones, tablets and notebook PCs,” said Michael Yang, senior principal analyst for memory & storage at IHS, in a statement. “Meanwhile, NOR’s once-broad portfolio of applications in low-end mobile handsets and desktop PCs has mostly matured, and its next killer market has yet to manifest.”
NAND memory, in the form of either raw NAND or eMMC, is now the standard memory used for most smartphones with the exception of Apple’s iPhone, and tablets with the exception of the Surface Pro from Microsoft, which uses a SATA-interface solid-state drive, according to IHS. These are applications that require high-density storage capacity along with low-power consumption and a small footprint, making eMMC a viable solution. While Samsung remains the key player, several others including SK Hynix, SanDisk and Toshiba are poised to gain ground, according to Yang.
However, there could be a potential oversupply of eMMC memory due to slowing growth in the smartphone and tablet markets, according to IHS. This also could result in a "large drop in eMMC average selling prices."
This oversupply scenario could be a continuation of market trends started in the fourth quarter of 2013. According to DRAMeXchange, a division of global research firm TrendForce, NAND flash vendors over estimated OEM demand in the fourth quarter, resulting in supply that exceeded demand for the quarter. This led to a 4.5 percent drop in revenue from the previous quarter, but a 16 percent increase over the same period in 2012.
As for the NOR market, the largest NOR applications are disappearing, said IHS. The good news is that serial peripheral interface (SPI) NOR is expected to find more use in both wireless and consumer devices, helping to offset the decline in the parallel NOR market, though it will continue to find homes in high-level industrial, medical, networking and military applications.
"SPI NOR’s relative simplicity in design and low manufacturing cost will prove appealing, and the memory will be especially attractive to manufacturers of low-cost cellphones that need to keep a lid on expenses," according to Yang.
Still, IHS analysts believe the industry "would be healthier if consolidation took place and reduced the number of players to four." Five suppliers currently hold 75 percent market share with several smaller manufacturers comprising the remainder of the market. Suppliers include Macronix, Winbond Electronics, GigaDevice, Micron Technology and Spansion.