| LONDON — The mobile phone market for flash memory is becoming more competitive with the intense fight among NOR-type flash makers now expanding to include NAND-type flash producers, market researchers iSuppli Corp. said Thursday (Sept. 16). NOR flash memory sales, including revenue from multichip packages (MCPs) will rise to $10.3 billion in 2004, up 39 percent from $7.4 billion in 2003, iSuppli forecast. Overall iSuppli predicts that flash-memory revenue, including sales of MCPs, will rise to $16.6 billion in 2004, up 46 percent from $11.64 billion in 2003. The prodigious year-over-year growth seen in 2003 and 2004 will not persist in 2005, but the market will continue to expand, with revenue rising to $17.5 billion, up 5 percent from 2004. Worldwide flash-memory revenue will rise at a Compound Annual Growth Rate (CAGR) of 14 percent from 2003 to 2008, iSuppli predicted. The success of the NOR flash market is being driven by its largest application: mobile handsets. Revenue from mobile handsets accounted for 66 percent of NOR flash revenue and for 39 percent of total flash sales in the first half of 2004, iSuppli estimated. This represents a 52 percent increase for NOR flash and a 150 percent increase for NAND compared to the first half of 2003. NOR-maker Spansion remained the number-one mobile-phone flash-memory supplier in the first half of 2004, a position it claimed from fellow NOR-manufacturer Intel Corp. in 2003. Spansion commanded 24.9 percent of the market on revenue of $845.7 million. Intel was the second-largest flash supplier to the mobile handset market, with a 23.2 percent market share on revenue of $785.4 million. Ranked third and fourth were NOR-flash suppliers Sharp Corp. and STMicroelectronics, which held market shares of 12.5 percent and 10.4 percent on revenue of $424 million and $354.4 million respectively. Samsung Electronics Co. Ltd. came fifth with a market share of 8.1 percent. Samsung's mobile phone flash memory business achieved blistering growth in the first half of 2004 but it was from a very low base. Historically NOR has been the dominant type of flash memory for mobile phones. Most mobile phones today use NOR for code storage, combined with SRAM or pseudo SRAM (PSRAM) for buffer or working memory. However, newer generation mobile phones not only are communicators, but also MP3 players, personal digital assistants and digital still and digital video cameras. These additional functions open up opportunities for NAND flash to be used as an alternative to NOR, iSuppli said. While NOR flash suppliers continue to favor a mobile phone memory solution that combines NOR flash with SRAM or PSRAM, NAND makers are promoting an alternative approach that combines NAND and SDRAM. While NAND will make inroads in feature-rich mobile phones, NOR will remain the dominant form of flash used in wireless handsets for the next several years, iSuppli predicts. By 2008, NOR will account for 80 percent of the flash found in mobile phones. In line with overall market trends, flash memory sales also have slowed in the third quarter. However, the fourth quarter should be very strong for flash, in line with normal seasonal patterns, iSuppli predicted. This will ensure another consecutive year of flash memory market revenue growth. | 
