- In the first quarter of 2021, the NAND flash memory market rebounded by 4.6% QoQ to $15.3 billion, while bit shipment increased by 12%.
- Leading manufacturers are developing new NAND flash with additional layers to lower bit density and increase manufacturing efficiency. In the first quarter of 2021, the bit shipment growth for the layers 64 to 130 climbed by over 20%.
- Samsung dominated the NAND market revenue share, SK hynix achieved the highest QoQ growth in revenues, and Micron led the industry in the volume production of 176-layer NAND flash.
Global NAND flash revenues increased 4.6% in Q1 2021 to $15.3 billion over the previous quarter. Distance education and remote working propelled the demand for notebook SSDs, which helped the big players in offsetting the reduced NAND flash demand from the server and data center market.
Associate Director Brady Wang said the continued expansion of smartphone storage capacities, particularly by the Chinese OEMs, created an unusual scenario for NAND flash usage. The average capacity of smartphones climbed 6% in Q1 2020, according to Counterpoint data. As a result, contract prices for NAND flash fell by 4-7% in Q1 2021, which is much lower than the 7-11% drop in Q4 2020. The decrease eased in late Q1 2021. In the same period, NAND flash spot prices fell 1-3% but started increasing by that quarter’s end.
Wang added that in Q1 2021, memory vendors were in full force migrating to more layers. Bit shipment increased 12% QoQ, while overall ASP decreased 6% in the same period. In terms of layers, the ratio of bit shipment for the layers 64 to 130 increased from 52% in Q1 2020 to 81% in Q1 2021. This increase in layer count allowed an annual reduction in NAND costs by an average of 20%, which however is less than the historical 30%. Ideally, NAND flash can reach more than 500 layers. However, in reality, the NAND flash production starts encountering several challenges after 100 layers, like a high aspect ratio and long manufacturing time. As a result, vendors adopt Core Over Periphery (COP)/Circuit Under Array (CUA) to reposition the logic circuit to below the memory cell. Doing so allows them to increase the number of net per wafer. Also, double stacking can help increase the number of layers quickly but may result in higher costs due to lower yields.
On the handset side, key NAND flash players are proactively marketing the high-density uMCPs at advantageous costs. Chinese smartphone MCP densities rose from 8GB/128GB to 12GB/256GB over the previous quarter.
Competitive Landscape
Currently, the NAND flash industry is dominated by six major players. This landscape is likely to undergo a major rejig in the near term, given the ongoing acquisition of Intel’s non-volatile memory solution unit by SK hynix.
Samsung
Samsung led the NAND market in Q1 2021 with $5.1 billion in revenues, overshadowing its nearest competitor by over 80%. The South Korean electronics giant continued accounting for over one-third of the NAND market revenue for the fifth consecutive quarter. The weakness in US dollar against the Korean Won worked out negatively for the company’s component business, but it was fully compensated by its end-user product business.
Samsung is migrating to the 128-layer 6th generation V-NAND, aiming to use this technology in the near term for driving its bit growth and cost competitiveness. Samsung’s single-stack process in the 128-layer 6th generation V-NAND allows it to have lower costs than competitors which use a double stack. However, the company will adopt its 7th generation V-NAND, a double stack-based 176-layer memory, later this year to reinforce its technological competitiveness at the cost of decreasing profit margin.
SK hynix
SK hynix’s revenues from NAND achieved a good 12% QoQ growth in Q1 2021 despite enduring a 7% drop in its ASP. This stellar performance stems from (i) the sales growth of its high-density smartphone memory products, and (ii) enhanced cost competitiveness of the company’s major products powered by yield improvements.
Research Associate Siddharth Bhatla said SK hynix achieved a bit shipment growth of a whopping 21% in Q1 2021, which was over double of the same for WDC and Samsung. The company expects the NAND market’s bit demand growth to be in mid-30% over 2021, which it plans to cater proactively in this year’s second half. By this year-end, the company plans to raise its NAND product mix of 128-layer to 80% and begin the mass production of 176-layer node.
WDC
Ranking third in revenue, WDC is the only NAND flash manufacturer that also makes HDDs. The company’s portfolio in laptop SSDs helped it benefit from the surge in PC demand, resulting in an 8% increase in its QoQ bit shipments in this quarter. The company’s diversified end-market portfolio in client devices and solution experienced a revenue growth of 10% and 8% respectively, balancing its 20% revenue decline in the data center market.
Micron
Micron is leading the NAND industry’s 176-layer node, having begun its volume production during the past quarter, which is ramping up considerably over time. Micron plans to make this node the company’s workhorse for 2022, augmenting the company’s bit growth and long-term cost reduction strategy. The company is focusing on increasing the mix of QLC NAND in its product portfolio. This technology’s cost-effectiveness is driving the transition of the compute memory industry from HDDs to SSDs.
Micron has positioned itself to capitalize on the booming demand for non-volatile memory products, which is created by the increased adoption of AI and 5G around the world’s data centers, intelligent edge and user devices.
