Companies that provide portable storage such as SanDisk and Lexar Media have seen a tremendous run-up in their fortunes since the second quarter of last year, as consumers snap up devices from digital cameras to cellphones.
Competition is coming in the form of mini-hard drives from companies such as Hitachi and Cornice. Major players such as Samsung and Apple Computer have already come out with mini-hard drive music players. Samsung even has a portable video player with a hard drive.
Still, the flash market is far larger, accounting for billions of dollars a year in revenue, and shows no sign of fading. And, with higher quality images and streaming video on the horizon, the growth for cards is expected to continue, analysts said.
"The outlook through 2007 is promising," said Joseph Unsworth, an analyst with research firm Gartner. "Applications such as digital video cameras and mobile phones will increasingly leverage flash cards... providing growth opportunities for the industry in the long term."
SanDisk and Lexar, which are among the leaders in the flash memory card market, are set to report their fourth-quarter and year-end results later this month, capping a year that saw shares increase about threefold for both companies. Lexar ended 2002 trading at $6.27 and closed on Thursday at $17.08. SanDisk finished 2002 trading at $20.30 but jumped in 2003 and closed on Thursday at $67.81.
And while these hot companies have cooled off recently because of concerns about increased supply of flash memory and how it will affect prices, analysts believe there is still a lot of room for growth.
The worldwide flash memory card market generated $1.7bn in revenue in 2002, and research firm IDC estimates that total increased by more than 100 percent in 2003.
"Carriers in Asia have already begun to bundle cards with phones, which is a huge opportunity for flash cards," said Mario Morales, an analyst with IDC.
