© corepics vof dreamstime.com Analysis | March 29, 2013
Surprise! NAND Flash market defies trends
Despite facing five consecutive quarters of decline and a slowdown in consumption in smartphones and tablets, the global market for NAND flash memory pulled off a surprise growth spurt during the last three months of 2012, causing sales to reach a record high.
NAND industry revenue in the October to December period of 2012 amounted to $5.6 billion, up an impressive 17 percent from $4.8 billion in the third quarter, according to IHS iSuppli. Samsung Electronics, with more than a third of total revenue, led the field. NAND flash revenue for the entire year of 2012 amounted to $20.2 billion. “The NAND flash market’s expansion in the fourth quarter was significant in two ways,” said Ryan Chien, analyst for memory & storage at IHS. “Not only did the increase defy the recent trend of sales sliding during the last quarter of a year, the expansion also resulted in the period having the largest revenue results in industry history. Major contributors to NAND strength in the fourth quarter included smartphones and tablets, even though density growth is projected to slow in 2013 for each smartphone, and has been negative for tablets since 2010. For these markets, rising volumes trumped the trend of slower growth in memory usage in the fourth quarter.” Also playing a notable role in driving NAND growth during the period were solid state drives, along with retail flash products like flash drives and flash cards that likewise continue to attract significant consumer attention. Flash bang The 17 percent sequential growth in the fourth quarter last year was in stark contrast to the average 6 percent drop in revenue that had occurred during fourth-quarter periods for the previous five years. This time, growth was the result of solid product demand relative to preceding periods of weakness, coupled with a return to health for flash manufacturers. An important factor also was strength in component pricing, which fueled similar vigor in product pricing, stock pricing and—ultimately—revenue. Overall, the revitalized state of the industry is attracting many new entrants, even though their presence is small in what is especially a scale-intensive space. Samsung and Toshiba remain biggest players The market share picture in the fourth quarter was similar to what it was a year earlier, with Samsung Electronics and Toshiba as the top two suppliers of NAND flash memory for the industry. Samsung had fourth-quarter NAND revenue of approximately $2.0 billion, ending the year with a total of $7.5 billion or 37 percent market share. Samsung’s quarterly revenue since 2009 has hovered between $1.7 and $2.1 billion, helped by integration with its booming mobile device business, particularly smartphones. Toshiba’s NAND revenue in the fourth quarter amounted to $1.8 billion for a year-end total of $6.2 billion—good enough for second place with a 31 percent share. SK Hynix had bigger fourth-quarter NAND revenue at $683 million than Micron Technology’s $672 million, although their year-end ranking was reversed, with Micron’s $2.7 billion giving it nearly a 14 percent market share, compared to SK Hynix’s $2.3 billion that translated into an 11 percent share. Intel, the fifth player of note, had fourth-quarter revenue of $484 million for a 2012 total of $1.4 billion, equivalent to 7 percent market share. The rest of the market, at 0.3 percent, was shared by once-bankrupt Spansion along with Powerchip Technology. Spansion products finally hit the market in the fourth quarter, though these are focused on customers of its industrial NOR flash and will not develop a sizable market share position. NAND flash output from Macronix and Winbond Electronics is also expected shortly, even though they are not expected to surpass Spansion’s $10 million fourth-quarter revenue level anytime soon.