Flash Memory Fears for 2009

DRAM figures for 2008, already weakened by oversupply, were absolutely crushed by the global financial crisis.  And the market outlook isn’t about to get any better.

Taipei-based DRAMeXchange has lowered its outlook for 2009 NAND Flash bit growth from 108.2 percent to 81 percent.  The market intelligence company cites weakened demand for flash memory as the source, stemming from a decrease in forecast demand for flash memory-based consumer devices in 2009.

The mobile phone market has already faced a 5 percent decrease in 2008 shipments versus expectations, according to Nokia.  DRAMeXchange expects the market to reach 1.16 billion units sold in 2009, a decrease of 5.4 percent versus 2008.  Consumers are reducing their spending habits as a result of the current economic slowdown—analysts expected the 2009 market to grow nearly 3 percent as late as November of 2008.  According to analysts, only two of thirty-six polled analysts now expect the 2009 mobile market to grow at all, with worst-case expectations calling for a market reduction of 13 percent.

The growth rate for digital cameras is similarly down in 2009.  While overall demand for digital cameras is higher than that of 2008 for all four quarters, the growth rate is expected to shrink to approximately 7.6 percent for the year.  That’s a drop from 2008 and 2007’s growth rates of 18.6 percent and 21.3 percent respectively.

USB Flash Drives are expected to grow to 193 million units shipped, but that only represents a growth rate of nine percent over 2008 sales.  It’s a substantial reduction against 2008’s growth rate of 26 percent.  And solid-state drives aren’t faring any better, either.  DRAMeXchange expects consumers to opt for magnetic storage in a clear majority of desktop and notebook purchases.  The penetration rate for SSDs in the low-cost PC market will be lower than ten percent for 2009. 

The enterprise market will face similar downturns in growth, mirroring the oversupply issues that continue to affect the NAND Flash market.  Fortune 1000 companies have plenty of storage on-hand, according to an article by SearchStorage.com.  Expect this to reduce 2009 storage budgets by up to half, with expectations for the growth of the storage market in 2009 to drop by half as well.

“Storage is still one of the better areas in the tech budget … but if the overall budget is being brought down, storage will still grow from year to year, but now it will grow at, say, 4 percent rather than 8 percent,” said Louis Miscioscia, managing director for Wall Street analyst firm Cowen and Company.

  • jaragon13
    I'll still spend money on my computer.
  • Darkk
    I am not sure why storage companies are so worried about? I went to Best Buy today to see if I can pick up a 2.5in 500GB portable hard drive and being cheap as it is they're SOLD OUT!! I checked other Best Buys in the area and all sold out.

    I don't think Seagate, Western Digital and SanDisk have much to worry about right now.
  • snotling
    The server Market will move to SSDs anyway, cutting back on energy costs, space and staff means consolidation, visualization and the need for fast data access. After all one employee costs more over 3 years than 200 SSDs.