Logo

Nav Bar
Home
spacer
Products
spacer
Support
spacer
Consulting
spacer
About Us
spacer
Contact
Nav Bar

NEWSLETTER SIGN-UP

Enter your e-mail address below to receive our newsletter.

Nav Bar
spacer
spacer News
Expo-Samsung sees fast NAND growth in 2006

By Doug Young / Reuters.com
January 6, 2006

LAS VEGAS, Jan 6 (Reuters) - South Korea's Samsung Electronics Co. Ltd.(005930.KS: Quote, Profile, Research) said on Friday it expects demand for its NAND-type flash memory to continue on a sharp growth track in 2006, fueled by the popularity of devices like portable music players.

The global market for NAND memory was worth an estimated $10 billion last year, up from about $7 billion in 2004, with Samsung's market share staying relatively constant at a dominant 60 percent, said Don Barnetson, the company's associate director of flash marketing, citing industry data.

He said the market's value is expected to grow about 30 percent this year, as fast-falling prices are more than offset by an expected explosion in sales of memory-hungry portable music players, digital cameras, and cellphones.

Samsung competes in the flash memory market with hometown rival Hynix Semiconductor Inc.(000660.KS: Quote, Profile, Research) , Japan's Toshiba Corp (6502.T: Quote, Profile, Research) and U.S.-based Micron Technology Inc.(MU.N: Quote, Profile, Research) , all vying for share of the fast growing and highly profitable sector.

"Flash is a strong profit center for Samsung," Barnetson told Reuters in an interview on the sidelines of CES, the largest U.S. consumer electronics show, this week in Las Vegas.

"It's an excellent business to be in and lots of folks are looking to enter. But we have a strong position."

Barnetson said portable music players, often called MP3 players, will be one of the main drivers for this year's strong growth, fueled by factors like the booming popularity of Apple Computer Inc.(AAPL.O: Quote, Profile, Research) iPod and Samsung plans to aggressively promote its own portable music players in the U.S. market.

He said MP3 players made up about 18 percent of the NAND flash memory market in 2004, but saw that share shoot up to 29 percent in 2005 as iPod and other product sales soared.

"It's growing a lot more quickly" than the overall market, he said. "We believe 2006 will be another strong year for MP3."

Another major growth driver will be cellphone sales, as third-generation (3G) mobile services that allow people to quickly download music and video files to their phones start to gain traction.

Flash memory used in cameras and cellphones actually saw its share of the overall market drop to 49 percent last year from 54 percent in 2004. But Barnetson said he expects that trend to reverse this year on the back of a new generation of cellphones.

"We expect it to grow more quickly than the aggregate market in 2006," he said.

He added that a new generation of applications for personal and laptop computers -- which typically use much cheaper traditional hard drives as their main memory source -- should keep demand growing strong looking out a few years.

He said a new generation of PCs that draw on flash-hard drive hybrid memory systems to cut power consumption for notebook computers is now in the very early stages of development. A new range of flash applications could also speed up performance for both notebooks and more traditional desktop computers.

As that sector picks up, he predicted that computer-related flash sales could account for 10 percent or more of the market over the next three years.

"This is going to start to become a substantial market," he said. "It won't be a large part in 2006. But over the next three years it'll start to grow and will be a double-digit figure on its own."