SAN FRANCISOWorldwide NAND flash memory revenue, which routinely expanded by triple-digit percentages in the late 1990s and early 2000s, will fall by 14 percent in 2008 and decline another 15 percent in 2009, according to a revised forecast issued Friday (Oct. 31) by market research firm iSuppli Corp.
NAND revenue will decline to $12 billion in 2008 from $13.9 billion in 2007 and fall further to $10.2 billion in 2009, according to the revised forecast.
iSuppli (El Segundo, Calif.) had previously called for a 3 percent decline in 2008 and 12 percent growth in 2009. This year will mark the first time that worldwide NAND flash revenue has declined on an annual basis, according to the research firm.
"Beyond the macroeconomic and structural challenges, the NAND flash industry also is experiencing the fundamental challenge of declining demand elasticity," said Nam Hyung Kim, chief analyst at iSuppli. "With sufficient capacity in their existing flash storage cards and USB flash drives, consumers don't need to upgrade their products and are not as sensitive to price declines as they used to be."
Unit shipments of 1-GB equivalent-density NAND chips are expected to rise by 126 percent in 2008, iSuppli said. While this is down from 179 percent in 2007, it still represents explosive unit growth, resulting in oversupply, according to the firm. In 2009, unit growth will decline to 71 percent, iSuppli predicted.
Over the past five years, the market has averaged a 192 percent increase annually, iSuppli said.
In 2008, the average selling price of 1-GB equivalent of NAND is expected to drop by 62 percent, followed by a 50 percent decline in 2009, according to iSuppli.
Just three years ago, NAND revenue grew by 62.2 percent, iSuppli said.