SAN JOSE, Calif. – Needless to say, 2009 was a terrible year for the flash memory market.
Thanks to the sudden upturn, the flash market has been hot in 2010, but the supply chain has suffered in the process, according to a report from Web-Feet Research Inc.
Web-Feet just released its latest quarterly report on flash memory, in which it states that both NAND and NOR are hot. The NOR flash market is expected to hit $5.7 billion in 2010, up from $4.7 billion in 2009, according to the firm. The NAND market is projected to hit $21.5 billion, up 33.4 percent over last year, according to the firm.
That’s the good news. The bad news is that the supply chain is taking a beating.
"The recovery caught the flash market by surprise in the 4Q 2009 and into 1H 2010, whereby the flash vendors for both NOR and NAND increased production capacity to their maximum yield," said Alan Niebel, CEO of Web-Feet, in the report.
"Concurrently, as the contraction of supply rippled through the market many OEM purchasers continued to source any available NAND flash supply and maintained the higher ASP levels," he said.
"Apple and other OEMs have procured large volumes of flash, which has forced others to double book in order to get some of the allocation. This action cascaded into other markets especially NOR and serial NOR, where they became supply constrained and prices rose as well," he added.
Many of the bigger memory players such as Samsung, Hynix, and Micron can trade off DRAM for flash production since the tool set needed to produce both is nearly identical. Last year DRAM margins were better so these companies switched more manufacturing capacity there. Now it sounds like flash is heating up a bit more, so these same companies could switch capacity over to flash, but of course then DRAM would suffer.
All in all it sounds like a very good year for the big memory companies.
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