Monday, September 21, 2009

NOR chip price drop

NOR chip will drop 27% in 2009
then stabilize in 2010

Buyers can expect price erosion for NOR flash memory for the rest of 2009, but prices will stabilize in 2010, according to market researcher IC Insights.

The average price of a NOR flash chip will fall from $1.68 in 2008 to $1.23 in 2009, says the researcher. The price will be flat in 2010 and increase marginally to $1.25 in 2010.
In 2009, NOR unit shipment will increase 1%, but with prices falling 27%, the overall NOR flash market will decline 26% to $4.6 billion. As prices stabilize in 2010 and unit demand picks up, the NOR market will increase slightly to $4.7 billion.
The largest market for NOR is cell phones, which use the flash chips for code storage. However, NAND flash used primarily for data storage, is being used more in cell phones and is replacing NOR.

Larson note: Now the question is as wholesale prices drop do you pocket the savings or pass it on to your customers? My prediction is that the savings will be passed on as, your competition, my completion ties to regain the market share they have lost over the last year. We will have to follow the general flow of the market and find better ways to be cost effective to ourselves and our customers

Howard Larson
Larson & Associates
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