NAND Market to Explode

Posted by Ken Cheung in Components, Research on Wednesday, August 2, 2006

The NAND market is preparing itself to break all revenue records in 2006, according to Semico Research. Even though prices dropped by over 50% in the first quarter, this market's growth will allow it not only to meet 2005's $11 billion in sales, but will support a full 44% growth to record-breaking revenues of over $16 billion.

The NAND market, the fastest-growing semiconductor market in history, has enormous price elasticity: As prices drop more new applications adopt the technology. This allows NAND to displace existing forms of media, fostering accelerated growth.

Semico's quarterly flash forecasts hovered within 4% of actual revenues in 2003, within 13% of actual in 2004, a year marked by a 65% NAND price collapse, and within 12% in 2005. The forecast is built upon a model that compares end-application demand using the Semico MAP model to production capacity from Semico's exhaustive fab database. This is layered upon pricing models extracted from historical market behavior, and is continually tested against WSTS history, company financials, and Semico's Inflection Point Indicator.

Source: Semico Research

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