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Was 2010 the Last Hurrah for NOR Flash?

EL SEGUNDO, CA — The global market for NOR flash memory will decline by almost 6 percent in 2011 after blockbuster growth last year—the first sign of the difficult years that lie ahead as the industry struggles with declining prices, according to new IHS iSuppli research.

NOR revenue in 2011 is projected to amount to $4.8 billion, down from $5.1 billion last year in what had been the industry’s best performance since 2004. The decline this year is in painful contrast to NOR’s 10.9 percent growth in 2010, an unusually strong period for the industry as it benefited from a ramping economic recovery. And while shipments will keep rising in the future as NOR finds its way into more applications, average selling prices (ASP) are weakening as a whole. As a result, NOR revenue will continue to take a hit, declining in the years ahead.

A type of flash memory used to store and run code, NOR can be found in a broad range of consumer electronics items, including mobile handsets, PCs, hard disk drives, DVD players, televisions and set-top boxes.

“In recent years, NOR has been steadily losing its share of the memory market to a rival flash technology, NAND, which costs less and has much higher memory capacity especially suitable for today’s smart phones,” said Michael Yang, senior analyst for memory and storage at IHS. “The robust results of NOR last year came when manufacturers cut back supply after demand for the product recovered.”

In particular, the first half of 2010 proved buoyant, with NOR suppliers optimistic that a rebound in PC shipments would carry NOR revenue higher, Yang noted. This optimism helped to drive a shortage of NOR flash chips, boosted ASPs and led suppliers to report record revenues. The market advance was short-lived, however, and NOR performance in the second half proved disappointing. Optimism for the PC market evaporated, with shipment growth of 6.4 percent in the fourth quarter falling short of the seasonal double-digit percentages that were expected. Supply then caught up to demand and pricing weakened as a result. Potential PC shoppers also started buying tablets—a big threat to NOR because of the fewer chips they require, compared to PCs—further shaking the NOR industry.

The effects of a weaker second half in 2010 showed up in the income sheets of major NOR manufacturers in last year’s fourth quarter. Manufacturers such as Samsung Electronics and Micron reported flat revenues, saved in large part by their less cyclical end markets, while revenue fell during the same period for Eon Silicon Solution, Winbond Electronics Corp. and Macronix International Ltd. An exception was Spansion Inc., which overcame six successive quarters of losses to post gains, given its new focus on embedded products.

As the end markets for NOR increasingly broaden and diversify, the industry’s prospects might well hang on finding a sustainable operating model, IHS believes. NOR’s fortunes appear headed for a decline in the face of two overarching trends: the use of more serial parallel interface (SPI) NOR chips that sport lower ASPs compared to their parallel switch counterparts, cutting further into manufacturers’ revenue; and the shift in handsets—NOR’s largest application—to the use of the rival NAND flash technology. After basking last year in its biggest revenue yet in more than a half-decade, the industry now confronts a stark new reality—the specter of an eroding market, weakening prices and diminished revenue for this and the years ahead.

Learn more about the latest developments in the memory market with Yang’s report, entitled: Was 2010 NOR’s Last Hurrah at:

IHS iSuppli

4 comments on “Was 2010 the Last Hurrah for NOR Flash?

  1. hwong
    February 27, 2011

    The advantage of NOR flash over NAND flash is the read speed but as the demand grows more for flash capacity for different applications, read performance becomes lower priority. In terms of cost, memory write, and capacity, NAND beats NOR by a wide margin. From now on, NOR market share will keep shrinking.

  2. Nemos
    February 27, 2011

    NAND Flash has become an attractive alternative for the data
    storage aspects of today’s cell phones because of its higher speed write and erase performance as well as its low cost-per-bit.

    (NAND and OR are reserved words used in Boolean algebra, and when we say NAND flash memory means that this memory use NAND (not and) logic to save/store data.

  3. saranyatil
    February 27, 2011

    Flash memory is the most widely used memory today especially with the increase in consumtions of mobile phones. now a days people started prfereng NAND over NOR for many reasons NANd allowes each cell to store 2 bits of data, it can indirectly acces the system codes , it reads significantly faster and also erases faster. designers expect alternatives for design purposes in order to come up with an excellent design and now NANd because of its additional feature is gaining more momentum compared to NOR.

  4. seel225
    February 28, 2011

    The cell size of NAND flash is almost half the size of a NOR cell. In combination with a simpler production process, NAND architecture can be offered with capacity for a given die size, resulting in a lower price tag. So we prefer to use the NAND implementation its because the NOR gates can be slower compared to the NAND gates. NOR reads slightly faster than NAND.NAND writes significantly faster than NOR.NAND erases much faster than NOR.


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