The NAND market is expected to decrease by 17 percent in 2006, ''due to the lack of outstanding demand drivers and the suppliers' race towards capacity expansion,'' according to the research firm.

In 2007, the NAND market is projected to grow only 3 percent due to strong price erosion, according to IDC. ''Following a severe correction in the first half of the year, low pricing and mobile demand will lead the market to balance late in 2007 when a few key players allocate additional capacity toward DRAM,'' according to the report.

There's more good and bad news. Good news: The NAND market revenue is projected to grow at a 14 percent CAGR from 2006 to 2010, according to the report.

Bad news: Bit price erosion will reach 42 percent, while bit demand will grow at a 96 percent CAGR during the same period. Digital still cameras and MP3 players ''will be replaced by mobile phone as a key demand driver for NAND flash,'' it said. ''SSD and NAND caching will begin influencing the market in 2010.''

Citing a weak pricing environment and a lackluster iPod introduction from Apple Computer Inc., Gartner Inc. slashed its 2006 NAND flash memory growth forecast by a whopping $1.5 billion, and predicted a sluggish market for 2007.

NAND flash vendors, not surprisingly, were upbeat about the current climate.

By: DocMemory
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