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Hoping for Calm Waters in the NAND Market


As 2012 draws to a close, both NAND manufacturers and OEMs that consume NAND are looking forward to a fresh new year in 2013.  Back in July, we reviewed Toshiba’s decision to cut NAND production by 30% in an effort to reduce excess inventory and bring prices back to more profitable levels.  Other manufacturers followed suit shortly after and the expected results became reality.



Apple Corporation, one of the world’s largest consumers of NAND memory, launched three new products in 2H12 – the iPhone 5, the iPad Mini and the iPad 4.  All three of these machines use NAND chips as their respective internal memory.  Because of this, Apple made another huge impact on the market despite all of the production cuts by NAND manufacturers.  Following closely behind is Samsung with their own lines of mobile phones and handsets.  These types of devices are two of the largest influencers on the NAND market.


2013 is, however, expected to be a rebound year for the market.  According to IHS, a growth of 11.4% is expected next year, with even higher expectations as flash memory revenues are anticipated to reach $33.3 billion by 2016.  The constant demand for faster mobile devices and increased storage is driving manufacturers to constantly update their devices with bigger and faster chips.


For example, Embedded Multimedia Card (eMMC) is showing increased usage in smartphones compared to regular NAND, which is still used by Apple.  Approximately 520 million pieces of eMMC will have shipped by the end of 2012, doubling last year’s figures.  Currently, the preferred sizes are 4GB and 8GB, but bigger sizes are found in larger-density devices and will become the norm sooner rather than later.


As it stands, NAND has leveled out somewhat and should stay that way until January.  Large price decreases are not expected but it will be nice to sail in calmer seas, at least for now.  Overall, the NAND production cuts we saw in 3Q12 have been beneficial to the market as a whole.  Pricing has moved back up to healthier levels and excess inventory levels have gone down.  It may have been a tough transition at the beginning, but all signs point to an improved and exciting year in 2013.

Brent Topa, International Account Representative
Written on Thursday, 01 November 2012 21:33 by Brent Topa, International Account Representative

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