NOR Pricing and Forecast—Second Quarter 2005

Semico Research Releases Report: NOR Pricing and Forecast—Second Quarter 2005

Phoenix, Arizona August 1, 2005 - The NOR flash market, currently enduring a period of declining revenues, will have trouble exceeding NAND’s sales for the first time this year according to a forecast just published by Semico Research Corp. This transition has been accelerated by NOR’s oversupply coinciding with an unanticipated NAND shortage.

Although the NOR market is bound to recover its strength after price declines subside, the 2005 oversupply will cause revenues to drop by 15%. Semico expects to see the market return in force, with revenues approaching $9 billion in 2006, zooming to a peak of more than $12 billion by 2008.

“Semico expects to see a correction in the second half of 2005 that will reverse 2004’s sharp NOR price decline, a decline that started with a mid-2004 supply/demand imbalance,” said Jim Handy, Semico’s Director of Nonvolatile Memory Services. “Unit and megabyte demand are still solid, so 2005’s revenue decline will largely be offset by growth in 2006.”

The leading NOR suppliers: Intel, Spansion, Sharp, STMicroelectronics, Renesas, SST, Atmel, and Macronix, will see a return to profits, while OEMs, like cell phone companies, Nokia, Motorola, and Ericsson, leading data processing OEMs like Dell, IBM, Apple, and HP, and contract manufacturers like Flextronics, Jabil, Sanmina-SCI, and Solectron, will slowly lose the upper hand in price negotiations. Handy remarked, “Such turns are inevitable, and it is critical to properly time transactions around them. This report helps to remove uncertainty about these market cycles’ timing and effects.”

NOR is used in widespread applications, ranging from PCs and peripherals through myriad consumer electronics devices and into the automotive and telecom spaces, driving this pervasive technology to grow in accord with the penetration of electronics into our lives.

The Semico NOR forecast methodology is perhaps the most complete and accurate model in the market. Semico’s quarterly 2003 flash forecasts hovered within 4% of actual 2003 revenues, and in 2004, a year marked by both NAND and NOR price collapses, Semico’s flash forecast remained within 13% of actual over the course of the year. The forecast is built upon a model that compares end-application demand using the Semico MAP model to production capacity from Semico’s exhaustive fab database. This is layered upon pricing models extracted from historical market behavior, and is continually tested against WSTS history and Semico’s Inflection Point Indicator.

This study is available for immediate delivery for $3,495. To purchase 2005 is Just Not NOR’s Year! Second Quarter 2005 Pricing & Forecast, Report Number: NV105-05, please contact Jim Feldhan at 602-997-0337 or jimf@semico.com.

To purchase NAND Falls Back into a Downturn: Second Quarter 2005 Pricing & Forecast, Report Number: NV104-05, please contact Jim Feldhan at 602-997-0337 or jimf@semico.com.

To review more information on either report, please visit http://www.semico.com/studies/category.asp?id=8

Recent Semico News

Semico News Release August 1, 2005: NOR Struggles to Maintain Lead: Will it Stay Ahead of NAND in 2005? Semico Research Releases Report: NOR Pricing and Forecast-Second Quarter 2005

Semico News Release July 28, 2005: NAND Makers Struggle to Keep Up: Huge Megabyte Growth Hard to Accommodate! Semico Research Releases Report: NAND Pricing and Forecast-Second Quarter 2005
http://www.semico.com/press/press.asp?id=156

Semico News Release July 27, 2005: Shortened Product Life Cycles: A Good Thing? Semico Research Releases Report: Foundry Wafer Pricing—Second Quarter 2005
http://www.semico.com/press/press.asp?id=155

Semico News Release July 25, 2005: Semico Forecasts Temperate Conditions Ahead http://www.semico.com/press/press.asp?id=154

About Semico
Semico Research Corp is a marketing and consulting research company located in Phoenix, Arizona. Semico was founded in 1994 by a group of semiconductor industry experts. We have improved the validity of semiconductor product forecasts via technology roadmaps in end-use markets. Semico offers custom consulting, portfolio packages, individual market research studies and premier industry conferences.