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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 revenue growing a modest but healthy 6% this year, according to an IHS iSuppli Mobile & Embedded Memory Market Tracker report from information and analytics provider IHS.

Revenue for mobile memory is projected to reach $14,9-billion this year, up from $14,1-billion in 2011. 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 dynamic random access memory (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 revenue climbing to $16,2-billion. By 2015, mobile memory revenue will peak at $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,” says 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 revenue this year of $10,5-billion, up 14% from $9,2-billion last year. Mobile NAND flash revenue this year will be 50% of the entire NAND market of $21-billion, demonstrating the strength of the segment.

Smartphones are the primary driver of NAND fl ash consumption, especially in memory-hungry Android handsets, whose operating systems require significantly more flash memory than that of their main competitor, the iPhone iOS from Apple. 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 fl ash total this year, the eMMC segment will account for $3,7-billion, up from $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. Mobile DRAM revenue this year will reach $6,6-billion, up 12% from $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. While 2-gigabit and 4-gigabit shipments have become the volume leaders, 8-gigabit mobile DRAM will become the sweet-spot density for handsets that sport the latest Android operating system, 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 $1,5-billion compared to $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. 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 revenue down.

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

Only one player has enjoyed great strides in the NOR market: Beijing-based GigaDevice Semiconductor Inc. saw its business grow rapidly in the fourth quarter last year 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 this year. And with high-volume projections being made for media tablets this year, the fortunes of the embedded memory market are looking up as well.

Overall, the embedded market still represents almost 5-billion NOR units in shipments projected for 2012, with a five-year CAGR in excess of 4% through 2016.