Why competition in the 3D NAND flash space is heating up

Market Realist

Must-know overview of Micron Technology: A DRAMatic growth story (Part 6 of 8)

(Continued from Part 5)

The 3D NAND space and Micron

Micron revealed plans to transition from planar NAND flash to 3D NAND flash, with volume production targeted for fiscal 2015 as planar NAND is scaling slowing down and reaching its limits. Management gave an update in the second quarter of fiscal 2014 earnings call by saying it doesn’t plan to release samples this year. “We decided that we’re not going to sample for now, we like our relative competitive position and where we are relative to what we hear others might be. And so we’re going till we’re a little closer to volume production before, we unnecessarily expose ourselves by getting samples out there in the market place.”

Micron CEO Marc Durcan said on the call, “The focus is going to be to deliver system level 3D NAND products and putting a bunch of non-enabled components out in the market place right now for our competitors to see is of limited value. I think we want to wait till a little bit closer to where we those system level solutions enabled and then of course we’ll be working closely with our most valued customers to make sure they understand what’s coming down the pipe and the value we can deliver for and with it.”

DRAMeXchange, a division of global research firm TrendForce, noted that with the increasing use of 20nm-class SSDs (“nm” stands for “nanometer”), eMMCs (embedded multimedia cards), and eMCPs (embedded multi-chip packages) in mobile devices, shipments of 20nm and 1xnm node products have risen above 90%. TrendForce said that since there are major obstacles associated with going below the 1xnm node, various NAND Flash suppliers have begun to accelerate development of 3D-NAND Flash as a means to overcome the memory scaling limit.

Samsung launched its 3D “V-NAND” storage technology, in the form of a 24-layer 128 GB chip in August last year, but recent unconfirmed reports mentioned that there has been a delay in the ramp up. On the lauch of V-NAND, Samsung explained on its blog that for the past 40 years, conventional flash memory has been based on planar structures that make use of floating gates. As manufacturing process technology has marched to 10nm-class and beyond, concerns on scaling limits arose, due to the cell-to-cell interference that causes a trade-off in the reliability of NAND flash products. This also led to added development time and costs. The introduction of 3D NAND will move focus away from miniaturization, which has traditionally focused on shrinking NAND cells. Instead, the shift will be toward increasing density via layering. Samsung cited IHS research and said 3D NAND technology will account for the majority of total flash shipments, equivalent to 65.7% by 2017. Samsung’s 3D V-NAND is expected to be adopted in many different applications, including SSDs, high-density memory cards, and other applications for consumer electronics.

The TrendForce report said Samsung expects to make a major entrance in the server SSD market via its V-NAND chips and has delivered samples to server vendors and data centers in the fourth quarter of 2013. The Korean company’s facilities will be based primarily in its existing Korean plant as well as the newly established factory in Xi’an, China.

SanDisk (SNDK), which has a joint venture with Toshiba for NAND, has its own 3D-NAND Flash technology, known as p-BiCS (pipe-shaped bit cost scalable) and will also be looking to exert major impact within the industry, TrendForce estimates. The two manufacturers’ 3D NAND Flash products are expected to be manufactured using 1Y (19nm x 19.5nm) and “1Z” nm technology in 2015, the report said. However, SanDisk expects its next two generations of planar NAND (1Ynm and 1Znm) to run its course and 3D NAND becomes less expensive to develop. News reports said the companies aren’t expected to ship their 3D NAND products until 2016.

Rival Hynix is also expect to foray into 3D NAND and sample its products this year. The company has been aggressive on its planar strategy and said it will strengthen its competitiveness in NAND Flash solution while accelerating the development of TLC (triple-level-cell) and 3D NAND Flash.

TrendForce projects 3D-NAND Flash will only account for an estimated 3% of the NAND Flash industry’s overall supply, since the majority of the manufacturers will still be in the testing and sample delivery phase. However, with faster development and mass production, 3D-NAND Flash market share is likely to rise up to as much as 20% in 2015. The NAND Flash unit cost is expected to lower rapidly and become cheaper per storage unit as 3D NAND Flash technology matures, TrendForce estimated.

Industry experts believe 3D NAND had yet to compete against the current planar technologies in terms of cost structure. They believe that developing 3D NAND on a less expensive scale will be one of the challenges if 3D NAND has to replace 2D NAND on a massive scale. Pacific Crest Securities analyst Monika Garg said, “3D NAND has higher endurance than current-generation 2D NAND technology, which makes it better for enterprise SSD applications.” She added, “But enterprise SSDs consume less than 5% of NAND bits per our estimates. This makes us believe that 3D NAND capacity additions could be limited in 2014.”

Manufacturers such as Hynix, Crossbar, Panasonic, and HP (HPQ) are also working on alternative non-volatile memories such as phase-change memory (or PCM), magneto-resistive random-access memory (or MRAM), and resistive random access memory (or ReRAM). Recent media reports said Micron and Sony Corp. are developing a 16-Gbit ReRAM via 27-nm process technology that was revealed at the International Solid-State Circuits Conference (ISSCC) in 2014. Sony expects to start manufacturing the ReRAM chips by 2015 for the storage-class memory (SCM) market that fills the performance gap between DRAM and NAND. Experts also believe Samsung to be working on diverse of next-generation memory technologies, including ReRAM.

Continue to Part 7

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