The table below represents iSuppli ' s ranking of the top suppliers of flash
memory for mobile phones in the first half of 2004. NOR-maker Spansion
in the first half remained the number-one mobile-phone flash-memory supplier, 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. The company ' s wireless
flash revenue nearly doubled compared to the first half of 2003.

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.

Rounding out the top-five was NOR and NAND-flash supplier Samsung
Electronics Co. Ltd., which had a market share of 8.1 percent. Samsung ' s
mobile-phone flash memory business achieved blistering growth in the first
half of 2004, with sales rising 1,187 percent from the same period a year
earlier. However, that growth was from a very low base.

More NOR vs. NAND
NOR historically has been the dominant type of flash memory for mobile
phones. Most mobile phones today employ NOR for Execute in Place (XIP) 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 (PDAs) and digital still and
digital video cameras. All this new functionality is driving up the data
processing and storage needs of mobile phones rapidly, opening opportunities
for NAND flash to be used as an alternative to NOR.
This has transformed the mobile-phone business into a highly contested
battleground for the NOR and NAND flash- memory makers.
While the NOR flash suppliers continue to favor a mobile-phone memory
solution that combines NOR flash with SRAM or PSRAM, the NAND makers are
promoting an alternative approach that combines NAND and SDRAM. This battle
is just beginning; of the $3.4 billion worth of flash memory shipped to the
mobile-phone market in the first half, 96 percent was NOR and only 4 percent
was NAND.
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. This is good news for the NOR flash
suppliers in light of strong expected growth for mobile phone shipments.

Q3 Flash Hiccup Doesn ' t Derail Growth
Due to slower-than-anticipated chip sales growth in the present quarter,
the financial community recently has voiced concerns that the semiconductor
market has peaked, and that the next chip downturn will arrive next year. In
line with overall market trends, flash-memory sales also have experienced
some slowing in the third quarter.

However, the fourth quarter should be very strong for flash, in line with
normal seasonal patterns, iSuppli predicts. This will ensure another
consecutive year of flash memory market revenue growth.

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 predicts.


www.isuppli.com