iSuppli claims reductions and weakness of consumer spending may slowdown the growth of NAND flash memory.
Amid troubling signs of order reductions and weakness in consumer spending, iSuppli is cutting its outlook for global NAND flash revenues growth in 2008 to the single digit percentage range, down from its previous outlook of a 27% rise.
Global NAND flash revenues are set to rise marginally in 2008, up from US$13.9 billion in 2007, iSuppli predicted. NAND flash is used heavily in consumer-electronics applications – including flash storage cards, digitial music players and USB flash drives – that are driven by retail sales. With consumer confidence taking a dive due to the US subprime mortgage crisis, the NAND market outlook has diminished considerably in 2008, iSuppli remarked.
"Unless the economy recovers vigorously later this year, last year's DRAM market disaster could be repeated in NAND this year," said Nam Hyung Kim, director and chief analyst, memory, for iSuppli.
In an early warning sign of consumer weakness, Apple has slashed its 2008 NAND order forecast significantly and has informed suppliers that its demand growth will slow in 2008 compared to 2007, according to iSuppli sources. This is expected to have a huge impact on the NAND market. With its extremely popular flash-memory based iPods, Apple was the world's third largest OEM buyer of NAND flash memory in 2007, with purchases of US$1.2 billion, representing 13.1% of the global market, according to iSuppli's OEM Semiconductor Spend Analysis tool. Before word of Apple's warning, iSuppli had predicted the company's NAND flash purchases would rise by 32.2% in 2008, helping drive significant market growth.