iSuppli Corp. has slashed expected revenue growth for the NAND flash memory market in 2008. Due to the worsening consumer spending environment, global NAND flash memory revenue is expected to rise to $15.2 billion in 2008, compared to its previous forecast of $17.9 billion. This equates to a 9 percent increase in 2008 over 2007 but significantly less than the previous estimate of 27 percent growth. 

“The major factor behind the diminished outlook is weakening consumer spending,” said Nam Hyung Kim, Director and Chief Analyst, memory ICs/storage systems for iSuppli. “NAND flash is used heavily in consumer-electronics applications-including MP3 players, USB flash drives and digital still cameras-which are driven by retail sales to consumers. Spending growth on these items is expected to slow in 2008 compared to 2007 due to the U.S. subprime mortgage crisis and its collateral impact on worldwide consumers and economies. In light of this development, the world's largest buyers of NAND-type flash will slow their spending growth in 2008.”

NAND flash memory ASPs (per megabyte) declined by 36 percent in the first quarter, according to iSuppli. The market research firm expects the decline in the second quarter to reach approximately 13 percent; however, pricing is expected to stabilize in mid-2008 with the result of positive revenue for the year.

NAND flash memory ASPs have declined by approximately 60 percent per annum for the last two years.  

iSuppli’s Kim believes the reduced revenues will force NAND flash manufacturers to cut capital spending plans.