NOR Turns the Corner: Third Quarter 2005 Pricing & Forecast

2005 Revenues to Hit $7.2 Billion

Phoenix, Arizona November 21, 2005 - The NOR flash market has finally risen above its 2004 doldrums and is poised to grow significantly now through 2006, according to a just-released study from Semico Research Corporation. NOR revenues, which had been steadily sliding since the second quarter of 2004, pulled forward in the third quarter, and are on a track to grow by 19% in 2006. Semico expects to see the market return in force, with revenues peaking at nearly $13 billion by 2008.

“The correction that Semico forecast for the second half of 2005 has materialized, reversing 2004’s sharp NOR price decline, the result of a supply/demand imbalance,” said Jim Handy, Semico’s Director of Nonvolatile Memory Services. “This market’s demand growth is solid, but 2005 saw a revenue decline that stemmed from an overcapacity. TL leading NOR suppliers, including Intel, Spansion, Sharp, STMicroelectronics, Renesas, SST, Atmel, and Macronix, are experiencing longer lead times and a return to profits”

NOR is used in myriad applications, ranging from PCs and peripherals, through 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.

Handy adds: “The OEMs who consume the world’s flash, including cell phone companies Nokia, Motorola, and SonyEricsson, leading data processing OEMs like Dell, IBM, Apple, and HP, and contract manufacturers like Flextronics, Jabil, Sanmina-SCI, and Solectron, are seeing small price increases and a return to more healthy lead times. Although changes like this are inevitable, this report helps these users to properly time transactions around market cycles.”

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 $3,500. To purchase, please contact Jim Feldhan at 602-997-0337 or jimf@semico.com, and reference NV107-05, NOR Turns the Corner: Third Quarter 2005 Pricing & Forecast.

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.
www.semico.com