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Study: NAND to propel flash card sales

The global flash card market will grow as prices of NAND flash memory decline in the first half of 2003, a Gartner report forecasts.

Worldwide sales of flash memory cards are set to grow, driven by a drop in NAND memory prices and a rise in sales of consumer devices with the technology, according to Gartner.

On Thursday, the research firm said the market for flash cards is set to reach $2.75 billion in 2003, a 38 percent increase on the $1.99 billion in sales racked up last year.

While demand will come from existing uses of the technology in devices such as digital cameras, new data storage needs will generate sales, according to Gartner. Applications such as mobile phones and digital video cameras are expected to drive a predicted 81 percent growth in demand for storage megabytes from 2002 through 2007.

Prices for NAND (Not And) electronic logic gate components--a newer type of flash memory that differs from the NOR (Not Or) electronic logic gate flash that previously dominated the market--declined in 2002 and in the first half of 2003, according to the report. That price drop has helped push flash cards into the consumer market, as opposed to the corporate market, as an increasing number of consumers find the benefits of the storage worth its cost.

"Advancements in flash card performance, in conjunction with decreasing prices at the component level, will drive new flash card usage in applications such as mobile phones and digital video cameras, providing growth opportunities for the industry," Joseph Unsworth, an industry analyst in Gartner's semiconductor group, said in a statement.

Gartner expects the Secure Digital format, backed by Qualcomm and SanDisk, and Sony's Memory Stick format to dominate in flash cards, predicting that they will account for a combined revenue share of 65 percent by 2007. These formats have strong industry support combined with compelling attributes.

The flash card market is driven by retail sales and is price-sensitive, the research firm said. As average prices stabilize through the second half of 2003, the consumer's ability to spend will be key in determining the demand. However, consumers may not be getting a good deal, because there are number of formats, and many of them are incompatible.

While the market for flash cards is growing, things aren't entirely rosy. Analysts say it will be increasingly difficult to shrink flash memory chips after 2005, which will cut into profits. Many companies, including Intel and Motorola are therefore looking into new technologies to drive the industry forward.