Despite a stagnant 2H13 for NAND flash memory, things are expected to pick up next year thanks to a rise in R&D and production of 3D NAND. Several of the largest NAND manufacturers have been working on the new type of NAND since August of this year. 3D NAND is the "next revolution" in flash memory and allows memory to be stacked vertically instead of put in a horizontal grid.
This new technology offers numerous benefits to the NAND market including a two-fold increase in density and write speed, a 50% reduction in power consumption and a 10X better endurance. Production costs are also expected to drop 30-40% due a diminished demand for lithography tools. However, we are still a ways out before mass adoption can begin to take effect. Manufacturers are still working on their own techniques, from multiple layer integration to laser annealing, for creating 3D NAND.
As NAND is expected to climb to over $30 billion in revenue this year and overtake DRAM for the first time, we are also seeing another anomaly taking place. The shrinkage rate of NAND wafers has outpaced Moore’s Law, "The current form of Moore’s law has been set since 1975, when Moore altered the pace to a doubling every two years." However, there is a limit on how small the films can go before problems arise, including cell-to-cell interference and bit flips. This is where 3D NAND could make a huge impact on the market.
Ideally, a proven and reliable production process for 3D NAND would allow NAND pricing to continue to fall across the board. Combined with an accelerating shrinkage rate, lowering manufacturing costs through increasing storage density, and leveraging older node production lines for the new chips, we may see a continued decrease in NAND pricing in 2014. All of these factors are in play as manufacturers compete against each other to jump into the next stage of NAND.