IHS: Flash memory market dips while mobile DRAM hits record high

The overall flash memory market declined in 2012 while mobile dynamic random access memory rose to its highest level yet in Q2, according to IHS iSuppli.

Overall, the flash memory market isn't doing too well, based on a new report from market intelligence firm IHS iSuppli.

Specifically, revenue for the flash memory market is projected to decline to $24.3 billion for 2012 -- down 4.7 percent from 25.5 percent from $25.5 billion in 2011.

To break that down further, the NAND segment will round out to approximately $20.8 billion while the NOR sector accounts for the rest at $3.5 billion.

Michael Yang, a senior principal analyst covering memory and storage at IHS, argued in the report that this activity (or lack thereof) is largely attributable to the proliferation of mobile devices.

Flash memory growth is due in large part to mobile handsets. With Apple and Samsung leading the way, phones today are constantly being refreshed with the latest features and processors—requiring more powerful memory products, in turn.

Thus, it might be no surprise in that in another report from IHS on Wednesday, the mobile dynamic random access (DRAM) segment was said to have had its best quarter ever.

For reference, IHS researchers asserted that mobile DRAM is preferred DRAM variant for integration on consumer devices.

Revenue for DRAM memory rose to its highest level yet in Q2 2012 to $1.85 billion, up from $1.83 billion at the end of the first quarter.

IHS analysts highlighted in the report the two major contributing factors to success for the mobile DRAM space: increased shipments matched with steady pricing.

First, mobile DRAM’s share of total DRAM bit shipments is now at 17.8 percent, up from 7.9 percent in the first quarter. Second, the price of mobile DRAM has fallen less than that of its besieged cousin, commodity DRAM. While commodity DRAM historically has been subject to great swings in pricing—with the product losing as much as half of its value from the second to the fourth quarter last year alone—mobile DRAM pricing is less vulnerable, falling 10 percent per quarter on average. Mobile DRAM also tends to be priced according to manufacturing cost, not based on the general balance between supply and demand.

As a result, DRAM companies are able to earn a more reasonable margin for their mobile memory products—unlike in commodity DRAM, where negative margins are frequently the rule.