Vision - July/August 2008 - (Page 14)

What lies ahead as flash prices drop and the technical implementation challenges for NAND grow? Using NAND Flash effectively comes with a price in industry learning to take advantage of productizing this new and powerful disruptive silicon technology. A Look at NAND NAND Flash embodies several technology and market characteristics that have driven the chip industry for decades, but in their more extreme forms: the ability to cost (and price) reduce over extended periods of time due to device scaling and technical innovation. NAND devices are found in a multitude of applications and NAND markets are quite large and growing fast. From a miniscule beginning less than a decade ago, NAND Flash has exploded on the electronics scene to become the solid state “memory of choice” in many diverse applications. It now rivals DRAMs in command of the industry’s investment resources, but lower priced than DRAMs, it promises to extend its lead in the coming years. Though the fundamental NAND Flash physics were invented in 1987, they were not applied in their current form until the potential for extreme scaling, error-tolerant chip design and multi-bit cells were fully understood. The charge was first led by flash pioneers Toshiba and JV partner SanDisk in the mid-1990s and later joined by Samsung. Others have joined the market more recently, including Hynix, ST Micro and the IMFT JV of Intel and Micron. The result was predictable: prices and profits dropped, investment soared, applications proliferated and the industry’s attention moved sharply from “all alternative memory technologies” to NAND Flash. The results also are remarkable: NAND became the lowest cost memory available in 2004 (less than historical solid state market leader, DRAMs) and the highest volume memory in 2005 (again, surpassing DRAMs). Today, NAND Flash is 5x cheaper and ships in 2.5x the GB vol- umes that DRAMs do. In 2007, more GB of NAND Flash were shipped in a single year, than DRAMs have shipped since their introduction in 1970. The gap is widening on both measures daily. NAND Flash is the new king of memories. NAND Market Displacements But mere market volumes and prices do not show the remarkable impact of NAND Flash, so far, on the larger electronics marketplace. Starting out as removable media for file transfers (replacing floppy disks with USB drives), and an alphabet soup of flash card formats for temporary or permanent file and image storage, NAND Flash is found in hundreds of consumer applications. In just a few years, solid state storage has sent film almost completely to the dustbin of history. Today camera shops sell digital cameras that produce photos that are easily integrated into the PC for storage and modification, easily attach to files for e-mailing and are the main source of visuals for popular websites like YouTube and FaceBook. In 2005, NAND Flash surprised all by kicking HDD from Apple’s MP3 player, the iPod. Current music devices are almost totally solid state, miniature beyond anything conceivable before, and portable with a large capacity that is easy to use and share. They also are cheaper. Cell phones are the fastest growing market opportunity for NAND Flash. With more than 1.2 billion units sold annually, NAND Flash is enabling the feature expansion of personal communications devices: Internet downloads, music and video storage. For active system memory, NOR Flash has remained competitive in the cell phone space, but the NVM growth has been almost all in the add-on of NAND Flash for additional phone features, starting with the high-end and percolating down to less expensive models. The disruptive aspects of NAND Flash can not be denied. It is not just in displacement of existing alternatives, but in the creation and expansion of brand new markets, based on NAND Flash’s price and performance attractiveness. Economy Slows NAND Sales According to research firm iSuppli, the slowdown in the economy will impact NAND Flash memory sales. The firm forecasts that consumer spending on MP3 players, USB flash drives and digital still cameras will slow compared to 2007. The firm predicts the global flash market will grow only nine percent to $15.2 billion in 2008. iSuppli had previously forecast the market would grow 27 percent to $17.9 billion. Source: iSuppli, 2008 iSuppli Figure: Global NAND Flash Annual Revenue Forecast Overview (Revenue in Millions of U.S. Dollars) Revenue ($M) � Percentage Growth 30,000 � Millions of U.S. Dollars 25,000 20,000 15,000 10,000 5,000 0 2006 2007 2008 2009 2010 2011 2012 � � � � � � 35% 25% 20% 15% 10% 5% 0% -5% -10% Percentage Annual Revenue Growth 30% Potential Markets NAND so far has pushed aside alternate technologies in market after market while www.ce.org 14 July/August 2008 http://www.ce.org

Table of Contents Feed for the Digital Edition of Vision - July/August 2008

Vision - July/August 2008 Contents Shapiro's Spectrum In This Issue The Economist C4 Trends Visionary Embracing Disrupting Technology Vaulting Ahead with Your Brand International Risk Stop Boomerang Products CEA Newsline Tech Speak Tech Policy Going Global Eye on Business Market Insider Just the Stats

Vision - July/August 2008

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