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Insights Tag: NAND flash storage

NAND Flash Recovery Begins on Rising Demand and Supply

London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – June 8, 2021

  • 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.

Feel free to contact us at press(at)counterpointresearch.com for questions regarding our in-depth research and insights, or for press enquiries.

Background:

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts

Brady Wang

Siddharth Bhatla

Counterpoint Research
press(at)counterpointresearch.com

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Top Smartphone Features Most Popular Amongst LATAM Users

According to the latest Counterpoint Market Monitor service, Smartphones represented 89% of Q3 2017 total mobile device shipments. Furthermore, smartphone volume increased by almost 8% compared to the same quarter in 2016, while ASPs decreased by almost 6% annually. Despite the decrease in ASPs, smartphone product features continued to improve.  However, with respect to smartphones features, LATAM is still behind many other regions.  The following is a snapshot from Q3 2017, of all the top features in smartphones.

Latin America Smartphone Product Specification Analysis

  • Almost 88% of smartphones shipped in LATAM during Q3 2017 were LTE enabled.
  • Argentina leads LTE enabled smartphone adoption in the region, while Peru and Colombia have the lowest rates of LTE adoption.
  • Almost 96% of the smartphones in LATAM run on Android OS. OS participation has not had much variation for most of 2017.
  • Four out of every five smartphones have an LCD display.
  • 56% of smartphones have a display size between 5.00”-5.49” and more than 72% have a display size that is <5.49”.
  • 74% of smartphones have a processor speed that is <2.00 GHz clock-speed while the remainder have higher speed (>2.0 GHz) processors – a segment that has more than doubled in share YoY.
  • One in two smartphones have a primary camera resolution >10.00 MP.

In 2017, Counterpoint conducted a series of consumer surveys in various countries around the globe.  LATAM consumers reported that they consider higher memory capacity, more battery life and a faster processor as the most important factors during the purchase of their next smartphone. Below is a closer look at two of the top features pointed out by consumers.

More Battery Life

High usage of public transportation and the lack of charging points in most public places makes battery life for many LATAM consumers the most important factor when choosing a smartphone. However, the average battery capacity of devices bought in LATAM during 3Q17 was only 2677 mAh, compared to a global average of just over 3000 mAh.

Since 2016, the global trend has been moving to 3000+ mAh batteries.  In LATAM, 3001-4000 mAh has been the segment with the biggest growth. In 3Q 2017 phones with larger batteries doubled their share YoY but remained a minority, with only 14% of the market.  In China during the same period, large battery devices represented 42% of the Chinese market. Both Samsung and Motorola brands have been driving the growth of this segment with Samsung Galaxy J7 and J5, and Motorola C Plus.

 

Exhibit 1: Smartphone Shipment Share by Battery Size

Source: Counterpoint Research: Quarterly Market Pulse Q3 2017

 

More Memory

Memory capacity has always been pushed down to minimum to decrease costs. In 3Q 2017, more than 75% of smartphones sold in LATAM had <16GB of NAND, with 8GB being the largest segment. This compares with a global average of 42%. Among all regions, only MEA-sold smartphones had a larger percentage of low memory devices with 89%.

A promising sign is that the segments of >32GB has more than tripled since last year, but it still represented only 22% of all the smartphones sold in LATAM during 3Q 2017. It is not surprising that our consumer research has shown that an increase in memory is within the top three requirements while purchasing a new device.

 

Exhibit 2: Smartphone Shipment Share by NAND Memory Capacity

Source: Counterpoint Research: Quarterly Market Pulse Q3 2017

 

LATAM, as a region, still has a lot of catching-up to do regarding smartphone features. However, users are becoming increasingly tech savvy and are increasingly demanding improved features when purchasing a new smartphone.  OEMs, especially the leading brands, will need to further understand local consumer desire and try to fulfill their brand users’ needs if they want to retain the loyalty of their current users.

 

Average Smartphone NAND Storage Capacity will Top 60GB by 2018

Flash Memory storage has become an important component in smartphones not only for consumers as their needs for storage keeps on increasing with content creation, consumption but also for OEMs from BoM costs perspective and suppliers looking to meet this ever-growing demand from smartphones to cloud data centers. We have been researching in detail about the NAND storage technologies (See here) as well as DRAM (see here) trends and would like to highlight some latest demand trends and how can suppliers meet this ever growing demand from technology perspective.

The NAND Flash demand has been growing almost exponentially, much of which is attributed to the growth of the avg. capacity in smartphones. The average capacity in smartphones is estimated to cross 50GB per smartphone this year and estimated to cross 60GB mark per smartphone in Q4 2018.

Exhibit : Global Average Smartphone NAND Flash Capacity Trend (GB)

In contrast, industry has been facing supply crunch as the 2D NAND output is no longer sufficient to cater to current and future rise in demand for smartphones as well as SSD demand in personal computing devices. To meet the growing demand and increase NAND bit outputs, the storage memory suppliers are transitioning from 2D NAND to 3D NAND technology & manufacturing, a necessary technology transition. However, slower than expected ramp from various players has hurt supply positions in the short – midterm.

As a result, over the last eighteen months the NAND memory prices have risen in the range of 15% to 40% depending on the memory type and density. While the move to 64L 3D NAND (from 2D NAND or 32L/48L MLC 3D NAND) will ease supply a bit, the transition to and adoption of higher density TLC 3D NAND will be the key to ensure healthy supply & business continuity in the future.

The detailed whitepaper on this topic is available for download here

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