A report today brings what may be some caution and some optimism for the likes of SanDisk Corporation (NASDAQ: SNDK) and other key flash memory makers. IHS’s iSuppli has a report saying that the total flash memory market will decline in 2012. The good news is that a rebound is expected in 2013 and beyond. This matters because SanDisk is reporting earnings on Thursday.
What is important is that the NAND and NOR flash memory market landscape is said to be shifting rapidly. More sophisticated mobile handsets are driving industry trends and are also said to be determining which suppliers will be successful.
The report shows that industrywide revenue for the flash memory market by year-end is projected to “decline to $24.3 billion, down 4.7 percent from 25.5 percent from $25.5 billion in 2011.” That reads strangely, but that is how the report wrote the data. It expects that NAND will account for $20.8 billion and that NOR will make up the remainder at $3.5 billion.
If you apply this solely to SanDisk, Thomson Reuters has a consensus of $4.96 billion in total revenue for 2012. If the estimates turn out to be spot on, then that would be a 12.4% decline from the $5.66 billion in reported revenue in 2011. On Thursday we will see if this means that SanDisk is holding up better or worse compared to peers.
iSuppli showed that this year’s drop is because of a larger-than-expected erosion in NAND prices. And for that good news about a better 2013… iSuppli forecasts that the flash memory market will grow by 11.4% and also that it will “then continue to expand at a steady clip” with a current flash memory compounded growth rate of 5.3% to $33.3 billion by 2016.
This iSuppli report also comes at a critical time on the stockcharts.com chart reading. SanDisk shares are down today but still up at $44.52 against a 50-day moving average of $43.29 and against a 200-day moving average of $42.38.
JON C. OGG