Processors Toolkit

Consumer demand calls for more flash memory

Michael Singer CNET News.com

Published: 22 Nov 2005 15:10 GMT

Soaring demand for consumer gadgets like the iPod and digital cameras has pushed Intel and Micron into an unlikely partnership to produce the flash memory that makes storing lots of data in a small space possible.

On Monday, the tech duo announced a $5.2bn (£3bn) joint venture that will produce NAND flash memory for Apple. Apple's Nano and Shuffle iPods both rely on NAND flash memory. It's also widely used in mobile phones and USB flash drives.

"Already the NAND Flash in USB drives has displaced floppy disk drives in PCs for transferring data, especially as density in NAND flash devices increases," said Jim Handy, an analyst at Semico.

Camcorders, which use various storage formats such as magnetic tape and mini-DVDs to store video, also are expected to migrate to NAND flash, Handy said. Already, a handful of manufacturers are making the transition. Panasonic, with its SDR-S100, which stores data on SD cards, is the latest to make such a move.

NAND flash memory is becoming so popular that it's already outpaced its cousin NOR flash memory in manufacturing sales circles. NAND sales in 2005 are expected to top $10.2bn this year, according to Semico. NOR flash is expected to pull in $7.6bn in the same time frame, Semico said.

NOR flash memory is used for code storage in applications, most notably for mobile phones and networking equipment.

The Semiconductor Industry Association, which follows sales trends, recently predicted that sales of NAND flash memory will grow 15.9 percent to $21bn in 2006. That number is expected to rise to an estimated $35bn in 2009, according to Semico. The entire market for NAND and NOR flash memory is expected to blossom into a $47bn market in 2009.

Currently, NAND flash sells for about $45 per gigabyte, except that from Samsung, which has a contract to sell its NAND flash to Apple at about $35 per gigabyte. The pricing discrepancy set off an investigation by the Korean government after officials became concerned that Samsung was selling its products at a lower price to a non-Korean company.

Increased NAND manufacturing, especially with the addition of Intel to the NAND flash market, should help drive down the price of consumer electronics devices, said Alan Niebel, an analyst at Web-Feet Research.

"Higher density and higher capacity components will mean cheaper and more available NAND in the long run, at very good prices," Niebel said, noting that Samsung has already developed a 16-gigabit NAND flash device and plans to launch it in 2006. Companies such as...

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