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Flash memory market to fall, forecast says

iSuppli's forecast predicts that worldwide NAND flash-memory revenue will fall by 14 percent.

This USB drive is made of solid gold, but its golden age is over. Super Talent Technology

With all the buzz about solid-state drives that Intel, Super Talent Technology, and other companies have been making, I am a little surprised to learn that the NAND flash-memory market--once one of the fastest-growing segments of the global semiconductor industry--is actually facing a historic downturn.

According to a forecast released on Friday by iSuppi, a technology research and advisory-services provider, the NAND-type flash-memory market has been stricken by weakening consumer spending, causing revenue to decline in 2008. Revenue is expected to decline in 2009, also.

In 2007, total worldwide revenue of the market was $13.9 billion; in 2008, this number is estimated to be about $12 billion--down by 14 percent. The forecast predicts that in 2009 the revenue will decline by another 15 percent.

The NAND market is being impacted by several factors. The biggest challenge is the sale of products that use NAND flash memory, inducing personal media players, flash-memory storage cards and USB flash drives. These products account for almost 80 percent of total NAND chip demand and are sold mostly in retail stores, where prices are continuously slashed because of the downturn in the global economy.

The second is the change in consumers' demand. As the storage capacity of flash-memory devices continues to increase, consumers don't need to upgrade their products as often and are not as sensitive to price declines as they used to be.

While this sounds depressing, it's actually good news for consumers, all in all, especially with the holidays coming up. Still, if you are looking to wait for the price of the solid-gold USB drive to go down, you might have to wait for a very long time.