We have certainly seen a lot of changes in the NAND market over the past nine months. Last summer, Toshiba led the way in production cuts, forcing acute spikes in pricing. As 2012 came to a close, positive news emanated from NAND manufacturers due to declining customer inventories and enhanced supplier promotion programs. However, those expecting increased SSD demand were left empty-handed. Yet, some of those forecasts were met with good news last month when SSD demand finally took off, causing a shortage in multi-level NAND (MLC).
As we move into 2Q13, NAND flash makers are not sure whether they should don sunglasses for sunny days this spring or bring out their umbrellas for six more weeks of lackluster business. Speaking of clouds, the cellphone and tablets market requirements for NAND-based storage have slowed. Cloud storage and streaming services are becoming more widespread and consumers are relying less and less on their on-board storage. According to iSuppli, the average memory capacity in cellphones fell to 12.8 gigabytes (GB) in 1Q13, down from 13.2GB twelve months prior. The average memory capacity in tablets was slashed from 32.1GB in 1H11 to 14.0GB in 1H13.
Combined with a continuous decline in computer sales, mobile memory has recently become a hot commodity. One popular type of memory used in mobile applications is called multi-chip packages (MCPs). A MCP consists of a low-power DRAM chip (LPDDR) integrated with a NAND chip. As you know, the NAND chip acts as the “hard drive” in your cellphone, storing photos, music, etc. The LPDDR chip acts like the memory modules in your PC. The most interesting point regarding MCPs is that their storage sizes are actually decreasing as new versions are released, despite the natural trends for the opposite pattern with modern electronics. Although NAND storage sizes are decreasing, the LPDDR sizes are not following suit. As cellphones continue to grow and change, and as their features become more sophisticated, the LPDDR sizes remain at 4 gigabit (Gb) and 8Gb in order to support the advancements.
Another big change in the cellphone industry is the reduction of high-end models that offer microSD support. Most users depend on these cards to store additional music and photos. Many manufacturers are no longer shipping models with slots for memory cards, opting instead for embedded storage. As cloud and streaming services use continues to expand, consumers will become less interested in purchasing additional hardware.
With all of these changes affecting such a large and popular market, we should expect to see a bigger push into the SSD market by NAND manufacturers. Micron Technology and SanDisk are both set on having a minimum of 10% of their revenue to be generated from SSDs. Other companies such as Macronix and Winbond Electronics are looking to take advantage of this changing market as they toss their respective hats in the ring.