New smartphones and tablets will act as key catalysts for continued healthy growth of the mobile memory semiconductor space in the next few years, with revenues growing a modest but healthy 6% in 2012.

Revenues for mobile memory are projected to reach US$14.9 billion this year, up from US$14.1 billion in 2011, said IHS. The mobile memory forecast includes the flash memory segments of NAND and NOR, the NAND subsegment of embedded multimedia card (eMMC), as well the mobile DRAM sector.

An even bigger 9% increase is anticipated in 2013 for mobile memory as more smartphone and tablet products requiring higher memory densities come into the marketplace, with revenues climbing to US$16.2 billion. By 2015, mobile memory revenue will peak at US$17.9 billion.

"The mobile space has been the engine for overall memory growth in the last few years, and it continues to shape and define the success of suppliers participating in the memory market," said Michael Yang, senior principal analyst for memory and storage at IHS. "Given the ongoing passion of consumers for mobile devices like smartphones and tablets, the outlook for mobile memory remains exceedingly optimistic."

The largest contributor to mobile memory is NAND flash given projected revenues this year of US$10.5 billion, up 14% from US$9.2 billion last year. Mobile NAND flash revenues this year will be 50% of the entire NAND market of US$21 billion, demonstrating the strength of the segment.

Smartphones are the primary driver of NAND flash consumption, especially in memory-hungry Android handsets, whose operating systems require significantly more flash memory than that of Apple's iPhone iOS, IHS said. Android handsets are projected to consume approximately 54% share of overall flash memory usage in the smartphone space, compared to 18% for the iPhone.

Of the NAND flash total this year, the eMMC segment will account for US$3.7 billion, up from US$2.8 billion in 2011. In particular, eMMC has become a viable mobile memory solution for high-end markets like smartphones and tablets, in which high-density storage capacity is required along with low-power consumption and a small footprint.

A second big contributor to mobile memory revenue is mobile DRAM, with tablets like the Apple iPad joining mobile phones as key segments pushing consumption of mobile DRAM, IHS said. Mobile DRAM revenues this year will reach US$6.6 billion, up 12% from US$5.9 billion in 2011.

The future of mobile DRAM also looks bright, as it is forecast to account for more than 32% of all DRAM bits shipped in 2015 - a dramatic increase from a 6.2% share in 2009, IHS said. While 2-gigabit (2Gb) and 4Gb shipments have become the volume leaders, 8Gb mobile DRAM will become the sweet-spot density for handsets that sport the latest Android OS, also known as Ice Cream Sandwich.

The third component of the mobile memory market, NOR flash, continues to decline amid weakness in several key segments. NOR flash is the only segment of the mobile memory market that will see revenue trend downward this year, falling to a projected US$1.5 billion compared to US$1.8 billion in 2011.

As handsets continue to migrate upward in their use of memory, NOR is increasingly in uncertain ground, unable to meet the growing demand for high density while keeping costs low, unlike its rival NAND, IHS pointed out. A lower-cost NOR product known as serial peripheral interface (SPI) NOR from aggressive Taiwanese suppliers has also been enjoying more prominent play of late, but its lower cost has pushed overall NOR revenues down.

Given the changes sweeping the NOR market, the traditional suppliers of NOR have seen their markets erode. For instance, NOR-related revenues in the fourth quarter of 2011 for Micron Technology fell a sequential 24%, while major NOR player Spansion has shifted focus to the more stable embedded market also in light of declining revenues.

Only one player has enjoyed great strides in the NOR market: Beijing-based GigaDevice Semiconductor saw its business grow rapidly in the fourth quarter of 2011 after quarterly revenue growth of more than 240%, in line with projections for the company to outpace other NOR suppliers in the near term.

For the embedded memory segment that makes up part of the total mobile and embedded memory market, optimism is returning with PCs forecast to enjoy a resurgence, buoyed by Intel's strong push of its Ultrabook platform as well as the expected launch of Windows 8 by Microsoft later in 2012, IHS said. And with high-volume projections being made for media tablets this year, the fortunes of the embedded memory market are looking up as well.