Memory makers would be wise never to take consumer demand for granted. It's a lesson all involved had to learn the hard way after the DRAM market crashed crashed a few years ago, and with the rise in popularity of solid state drives and products that use them, NAND flash memory is proving to be their mulligan. Even still, a repeat of what happened to DRAM sales is possible, and surprisingly enough, it's the Ultrabook market that's driving sales of NAND flash memory, not all those supposed PC-killing tablets.
If IHS iSuppli's projections are spot on, NAND flash revenue will climb to $22.9 billion in 2012, up a "healthy 8 percent" from $21.2 billion in 2011. Looking longer term, the use of NAND flash memory in three key markets -- Ultrabooks, smartphones, and tablets -- will push revenue to $30.9 billion by 2016.
One thing that's interesting about all this is the fact that Ultrabooks are playing the biggest role right now, and because "consumers did not embrace tablets as enthusiastically during the fourth quarter [of 2011] as initially expected," last year's NAND flash memory sales actually fell below expectations.
"Given the lukewarm performance of the tablet segment last year, there was some trepidation coming into 2012 for the NAND industry," said Michael Yang, senior principal analyst for memory & storage at IHS. "But even though most NAND manufacturers had planned to be on the fast track in 2012 to increase production at newly built fabs, each supplier has since reduced capital spending compared to its original plans, electing to moderate supply expansions to allow demand to catch up. Such a strategy will avoid a precipitous price decline that the industry won’t be able to withstand, leading to more optimism for a stronger 2012."
IHS iSuppli called Ultrabooks the "shining new hope" for NAND sales as suppliers push for continued adoption of SSDs into thin and light notebooks. Combined with long battery life and fast boot-up times, Ultrabooks have grabbed the attention of both home consumers and corporations. The way IHS iSuppli figures it, Ultrabooks will account for 15 percent of total NAND flash sales, while tablets will account for 12 percent.