SAN FRANCISCO—After contracting 20 percent in 2012, the market for NOR flash memory is projected to shrink again in both 2013 and 2014 as more handsets turn from NOR to NAND flash, according to market research firm IHS iSuppli.
According to the latest IHS flash dynamics market brief, NOR revenue is expected to slip 2 percent this year to $3.4 billion. NOR sales are expected to further decline another 5 percent next year before picking up again in 2015 and 2016, IHS said.
“NOR—ironically—is turning out to be its own worst enemy in its traditional stronghold of cellphones,” said Ryan Chien, analyst for memory and storage at IHS, in a statement. “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 cellphone shipments in 2012, NOR is facing a tough road ahead.”
But Chien said he expects new applications for NOR to eventually stop the market’s decline. Top NOR suppliers such as Micron Technology and Spansion have accelerated efforts to diversify sales into new segments like home automation and automotive infotainment, he said. But while offering better growth prospects, these segments are much smaller than the cellphone market.
The overall decline in NOR revenue was also due to the loss of market share suffered by higher-cost parallel NOR, IHS said. Gains were made instead by the low-power—and more economical—Serial Peripheral Interface (SPI) NOR segment, which ate into overall revenue, the firm said.
For Micron, NOR sales proved disappointing, but were tempered by some positive signs, according to IHS. Micron reported a 6 percent drop in NOR revenue in its November quarter, IHS said. Customer demand remained weak, and many NOR customers continued to transition toward NAND, IHS said.
Given its reduced presence in the cellphone and PC space, the 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, IHS said. A leaner, more nimble operating model is also arising throughout the NOR industry, as it contends with lowering prices and a shrinking base in formerly strong established markets, according to the firm.
Future NAND generation might face data retention issue over long period of time, which device might not boot after put on shelf too long. NOR flash might be required to store critical boot code to boot up. If it is true, we might see strong return of NOR flash in the future.