Flash memory grew strongly, DRAM slipped

MP3 players, multimedia / multi-purpose mobile phones and home entertainment devices will continue to drive memory chip revenues in the coming years.

According to SIA Technology Association (USA), digital signal processing equipment (DSP) for communication products will grow most clearly (17.2% and reach 9.1 billion USD) compared to all other chip types next year thanks to the business of high-resolution mobile phones and camcorder.

Flash memory is still a "hot" item, led by NAND, integrated in MP3 devices, digital cameras and many other electronic products. Meanwhile, NOR flash, dedicated to accessing and running mobile phone software, will grow relatively slowly.

In 2006, flash is likely to reach 15.9% (21 billion USD) after 2005 with a successful rate of 16.1%, in which NAND revenue increased by 23.5% in the next 12 months while NOR is 6.1%.

DRAM memory chips will have to go through a crisis and drop 10.1% of global revenue, to approximately $ 23 billion. This year, DRAM also dropped 4.8% and earned $ 25.6 billion.

SIA said that total revenue of processing equipment in 2005 increased by 6.8%, reaching 227.6 billion USD, 0.8% higher than previously anticipated. Accordingly, the global semiconductor industry will grow steadily for at least another 3 years with a total of USD 306 billion by the end of 2008.

SIA believes that terminal markets such as PC will grow 10% in 2006 while mobile phones are 13%. Home entertainment products such as digital TVs and MP3 players even outperform (52%).

The Asia-Pacific region will lead the semiconductor industry in the coming years at a rate of 16.4% and revenue of USD 103.3 billion. Next is Europe (11.4%, 115.1 billion USD).

Revenue of processing equipment of Japan this year decreased 2.6%, to 44.6 billion USD. Europe increased slightly by 0.1% and reached 39.5%. However, SIA predicts Japan will recover soon next year with growth rate of 5.2% and Europe 4.9%.