Flash revenue expected to overtake DRAM in 2012

Market news |
By eeNews Europe

IC Insights (Scottsdale, Arizona) projects that flash memory revenue will hit $32.8 billion in 2012, up 11 percent from 2011. Meanwhile, the firm predicts that DRAM sales will slide to $30.3 billion, down 3 percent from 2011 due to softening average selling prices (ASPs), according to the firm.

Capital spending for DRAM is also expected to decline to less than $5 billion in 2012, according to the firm. This would translate to roughly 4.3 percent of expected DRAM sales, the lowest level ever, according to IC Insights. By contrast, DRAM capital spending equated to roughly 7.3 percent of sales last year and about 11.3 percent of sales in 2010, according to the company.

Since the mid 1990s, flash memory units shipments have grown by a double-digit percentage every year except last year, when units grew by 9 percent, according to Brian Matas, vice president of market research at IC Insights. Matas said that the firm expects flash shipments to return to double digit growth in 2012 and for the foreseeable future.

"There are a lot of mobile platforms that are driving flash growth [to levels] even greater than what we have been seeing," Matas said, pointing to smartphones, media tablets, PC solid-state drives (SSDs) and embedded SSDs.

Of the projected $32.8 billion in NAND sales for 2012, IC Insights projects that $29.5 billion will come from NAND flash, up 15 percent from 2011. Meanwhile, the firm projects that NOR flash revenue will shrink to about $3.3 billion in 2012, down from about $4 billion in 2011.

By 2016, IC Insights projects that NOR flash will account for only 4 percent of all flash memory revenue, down from 13 percent last year and 35 percent in 2007.

IC Insights projects that NAND flash revenue will grow steadily over the next five years, reaching $55.6 billion in 2016. The firm expects DRAM revenue to grow to $54.3 billion in 2016 from $31.2 billion last year.

Matas also predicted consolidation among DRAM players, speculating that the increasing costs of production will cause some weaker players to drop out of the market and curb the over expansion that creates the boom and bust cycles that have plagued DRAM from the beginning.

"It’s going to be more difficult for DRAM players to overspend than it was in the past," Matas said, noting that the high cost of modern fabs and production facilities will make it all but impossible for some debt-ridden firms to keep pace.


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