By Lucas Mearian
January 5, 2009

A decreased demand for NAND flash-related applications has led DRAMeXchange Technology Inc. and other analysts to lower their outlook for 2009 NAND flash chip sales. DRAMeXchange trimmed its forecast for higher chip sales from 108.2% to 81%.

The research firm expects the market to reach 1.16 billion units sold in 2009, a decrease of 5.4% over 2008. While the lowered sales expectations may not appear dramatic, over the past three years NAND flash sales grew 175%, 151% and 121% in 2006, 2007 and 2008, respectively. So 2009 will be the first year in recent memory that the market will likely see only double-digit growth.

Gregory Wong, an analyst at Forward Insights, said NAND flash chip sales were down 20.1% between 2007 and 2008, with 12.4 billion flash chips sold last year, compared with 15.8 billion in 2007. He doesn't expect those figures to improve for 2009. While Jan. 26 marks the beginning of the Chinese Year of the Ox, Wong said Asian workers will have little to be bullish about when it comes to the technology marketplace.

"The layoffs in Asia will occur just before Chinese New Year. This way the companies will avoid paying year-end bonuses," Wong said. "If those rumors are true, there will be a lot of people let go." Wong said widespread layoffs will hit NAND flash chip production and sales negatively.