Multi-Chip Packages Raise Accounting Issues for Flash Memory Market Revenue, Web-Feet Research.

MONTEREY, Calif. -- Following the close of the fiscal year for Japanese suppliers on March 31, Web-Feet Research (WFR) revised its 2004 Non-Volatile Memory Market Shares report to reflect the final Flash memory market revenue. WFR found the 2004 Flash memory market to be $17.3 billion, nearly 11% higher than the $15.6 billion reported by WSTS and other market research firms. That variance appears to stem from differences in recognizing the revenue from Flash memory-based Multi-Chip Packages (MCP).

WFR estimates that Flash memory vendors shipped approximately $5.5 billion of Flash-based MCP components in 2004, which is included in the $17.3 billion Flash market. Flash-based MCP products generally include multiple Flash die and xRAM (SRAM/PSRAM/DRAM) die, bonded together in a single package. Although separating the value of the Flash memory from that of the xRAM is desirable, in practice it is difficult because the vendors do not report shipments to WSTS uniformly.

To ensure consistent tabulation of the Flash market, WFR accounts for the entire value of the Flash-based MCP.

WFR collects the Flash memory shipment data through the Flash Memory Reporting Association (FMRA). Founded in 2000, the 17 FMRA member companies accounted for nearly 99% of the worldwide Flash memory shipments in 2004.

Companies reporting to WSTS are asked to divide MCP revenue into its Flash, SRAM, and DRAM components. In practice, this rule is not applied consistently by the suppliers, which distorts quarter-to-quarter and year-to-year comparisons. Nevertheless, most market research firms correlate their market numbers with the WSTS results.

The difference in the Flash market size reported by WFR and WSTS is due to accounting methodology. WFR believes its method provides a better estimate of the Flash memory market and forecasts the 2005 Flash memory market will grow 11%, reaching $19.2 billion. Most of this growth is driven by the high demand for NAND components and MCP configurations.

Data in the accompanying table are excerpts from the 2004 Non-Volatile Memory Market Shares by Vendor report from Web-Feet Research that also includes segmentations for NOR and NAND, Serial NOR, EEPROM, and others.

2004 Flash memory market vendor ranking

                   (Million $)
    1.  Samsung       4,897
    2.  Spansion      2,411
    3.  Intel         2,349
    4.  Toshiba       2,067
    5.  STMicro       1,196
    6.  Renesas         865
    7.  Sharp           801
    8.  Macronix        393
    9.  SST             347
    10. Hynix           315
    11. Others        1,669
        Total        17,310

About Web-Feet Research

Headquartered in Monterey, California, Web-Feet Research provides business consulting and market research services in the memory and storage markets, with emphasis on Flash memory components, Flash cards and small form factor HDD for mobile applications.