Smartphones and Tablets Are Driving Growth in This Industry

Smartphones and tablets will drive growth in the mobile memory semiconductor market in the coming years, according to IHS iSuppli, with revenues in the space expected to increase a respectable 6 percent this year and 9 percent in 2013.

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IHS predicts that mobile memory revenues will climb to $14.9 billion in 2012, compared with $14.1 billion in 2011. In 2013, as new smartphones and tablets are introduced that require greater memory densities, revenues are expected to reach $16.2 billion. A peak is expected in 2015 with revenues of $17.9 billion. The outlook includes the flash memory segments of NAND and NOR, the NAND sub-segment of embedded multimedia card (eMMC), and the mobile DRAM sector, IHS said.

“The mobile space has been the engine for overall memory growth in the last few years, and it continues to shape and define the success of suppliers participating in the memory market,” said Michael Yang, senior principal analyst for memory and storage at IHS. “Given the ongoing passion of consumers for mobile devices like smartphones and tablets, the outlook for mobile memory remains exceedingly optimistic.”

The largest contributor to mobile memory is NAND flash, said IHS, and smartphones are the main drivers of NAND flash use — especially Google (NASDAQ:GOOG) Android devices, which require far more flash memory than Apple’s (NASDAQ:AAPL) iOS. IHS predicts that Android handsets will account for 54 percent of overall flash memory consumption in the smartphone space, compared to 18 percent for the iPhone.

The eMMC segment will account for $3.7 billion of the NAND flash total for the year, up from $2.8 billion in 2011, as eMMC emerges as a useful mobile memory solution for pricier smartphones and tablets, which require high-density storage capacity along with low-power use and a compact size. Mobile DRAM revenues this year are expected to hit $6.6 billion, an increase of 12 percent from $5.9 billion in 2011. Mobile DRAM will account for more than 32 percent of all DRAM bits shipped in 2015 — a massive leap from a 6.2 percent share in 2009, IHS said.

The only segment of the market that’s not looking at a bright future is NOR flash, with revenue expected to continue its downhill slide this year to $1.5 billion compared to $1.8 billion in 2011. As handsets continue to demand more and more memory, NOR cannot compete with its rival NAND in providing high density at a low cost.

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