Demand for flash-based microSD cards will drop significantly as feature phones are gradually losing ground to smartphones, which will result in a dwindling NAND flash memory controller market, according to Khein Seng Pua, chairman of Phison Electronics.

Feature phones utilize mainly 4GB microSD cards - still a major market for NAND flash controller suppliers, said Pua. However, demand for such external storage has been negatively affected by a shrinking feature phone market and the growing popularity of smartphones that come with embedded MMC (eMMC) solutions. More smartphones now come with internal storage of 16GB or more, which is sufficient to meet users' storage needs, Pua said.

Faced with falling microSD card demand, NAND flash controller developers should enhance their offerings to include products targeted at eMMC and solid-state drive (SSD) devices in order to stay competitive in the field, Pua suggested.

Pua predicted that NAND flash controller shipments for microSD cards will decline at least 30% in 2013. ASPs for the card controllers will also fall, as suppliers cut prices to secure new orders, Pua said.

Phison has stepped into the market for SSD and eMMC controllers, and built a customer base, Pua noted. The company has also developed eMMC 4.5 controller chips, which it regards as a key product for 2013, Pua said. Pua expects Phison's monthly eMMC controller shipments to expand from the current four million units.