Spansion displaces Intel as largest NOR Flash supplier

Posted by Wolfgang Gruener

El Segundo (CA) - AMD's former Flash memory unit Spansion has finished the 2006 calendar year as the world's largest NOR Flash memory manufacturer. According to iSuppli, the company increased its revenues by 25% year over year, while Intel saw its revenues declining by about 10%.

Spansion its reach in the NOR Flash memory market and now dominates the segment by a substantial margin. Spansion ended the 2006 calendar year with a market share of 30.4%, up from 25.6% in 2005. Intel dropped from 29.0% to 24.2% in the same time frame. Spansion's revenues increased by 25.6% to $2.6 billion for the year, while Intel lost 9.9% and came in at $2.0 billion.

"Although the NOR flash memory market expanded in 2006, it turned out to be a tough year for suppliers of the part," said Mark DeVoss, senior analyst with iSuppli. "While 2006 was not as brutal as 2005, when overall revenue declined by 15.5 percent, market conditions were still daunting, characterized by eroding Average selling prices (ASPs) in all market segments. ASP erosion was most pronounced in the mobile-phone sector, which represents the largest market for NOR flash."

While the current ranking indicates that Spansion has been gaining market share in NOR Flash - a technology that is used for read-heavy applications, such as housing an operating system - it is questionable, if Spansion really should feel comfortable as being the largest NOR supplier at this time. NOR Flash has become a volatile segment that not only has lost shares to cheaper NAND Flash (a technology that is mainly used for write applications such as storing digital music and images), but - according to DeVoss - NOR is also very dependent on the handset market.

DeVoss believes that Spansion has been taking market shares from Intel, but Intel "does not appear to do much about it," he said. Intel recently focused on its NAND Flash joint venture with Micron, which supplies NAND Flash to Apple and will cover the Introduction of Intel's Flash cache technology "Robson," which is expected to debut in mid-Q2 of this year. However, DeVoss does not expect Intel to depart from the NOR market, but rather prepare a transition to phase-change RAM (PCRAM) as a replacement for NOR Flash.

On the other side, Spansion recently has been moving into the NAND market with its ORNAND devices, which are basically NAND devices that are based on NOR cell technology.