The 4Q13 numbers are out…and they are not great. Heightened confidence in OEM demand in the 4th quarter of last year has left a large oversupply in the market. Supply eclipsed demand, resulting in abundant excess stock. Revenue fell to $6.168 billion in the NAND flash market, down 4.5% from 3Q13. Several manufacturers suffered negative QoQ growth while others actually continued to grow.
NAND manufacturers are continuing to push R&D and production on 3D NAND. The plan is to start from the enterprise sector and work their way down, but there are significant challenges in the way. High aspect ratio is a major concern as new etch and deposition technologies are needed to achieve what is known as “staircase” etching. There are also possible issues with atomic-layer deposition, in that the layers across the full wafer must remain constant, otherwise the mechanism may fail.
As we saw last month, 3D NAND has numerous advantages and the NAND market would benefit greatly from this type of technology. Some companies, such as Sandisk, are going to continue pushing 2D NAND due to their capital expenditures on manufacturing equipment as well as the continuously expanding market that is projected to reach $38 billion by 2016. 2D NAND still remains the most cost-effective product with the smartphone and tablet markets still demanding large quantities of NAND.
Manufacturers are looking to start moving to mass production of 3D NAND in 2014 as they work to improve yield and defect control. Some manufacturers have pushed it out to 2016, but it is expected that 3D will become the future. There are still plenty of hurdles to get over before we see everybody put on their 3D glasses in preparation of the future.