The NAND flash business is suffering a triple whammy, according to analysts iSuppli: unit demand is falling off, revenues are declining and consumers don't feel they need more storage capacity.
"Unlike other memories, which depend more on non-consumer/non-retail products, NAND flash is bearing the brunt of the challenging retail conditions," said Nam Hyung Kim, iSuppli's chief analyst.
"Combined with uncertain global economic conditions and a lack of killer applications, the NAND flash memory business is facing a triple whammy. Beyond the macroeconomic and structural challenges, the NAND flash industry also is experiencing the fundamental challenge of declining demand elasticity. 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."
iSuppli has revised its forecast of a 3 per cent decline in NAND revenues this year to a 14 per cent decline.
For next year. the revision is very much more dramatic. iSuppli has reversed its forecast of 12 per cent growth in 2009 to a 15 per cent decline in 2009.
iSuppli calculated the 2007 NAND market at just under $14bn, the 2008 NAND market at $12bn, and the 2010 NAND market at just over $10bn.
ASPs declined 60 per cent in 2007, and are expected to fall 62 per cent in 2008 and projected to fall and a 50 per cent fall in 2009.
For the big NAND flash manufacturers, Samsung, Toshiba, Hynix and Intel/Micron, the choice is stark: cut capacity or bleed red ink.
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