Competition in the NAND market has heated up significantly as of late, due in part to the release of the iPhone 6 and 6 Plus in September. Samsung repositioned itself as Apple’s main supplier of NAND flash chips after resolving their multiple copyright infringement issues over mobile devices. Samsung’s volume grew 10 percent during 3Q14 and they posted a favorable operating profit as well. This boost in sales will affect the global eMMC and eMCP market, as demand for the iPhone 6 remains strong and consistent. Apple consumes roughly 10 percent of the world’s NAND flash and this number is expected to double in 2015,all of which is great news for Samsung.
However, despite a volume hike and encouraging profit, Samsung’s market share fell below 30 percent for the first time since 1Q12. The rivalry among NAND manufacturers is closing the gap between Samsung’s lead position and second and third place companies. The Chinese market has increased their need for NAND flash causing the manufacturers to push harder for market share. NAND-based products, such as notebook SSDs and smartphones, are showing enhanced growth as manufacturing processes are moving to under 1x-nm. OEM manufacturers of these consumer products are competing against the top brands in China, increasing the country’s demand for flash chips. The Chinese-based brands are capitalizing on improved hardware design standards to contribute to the growth. If this rate continues, we should see a 10+ percent increase in NAND usage from China in 2015, putting them at 30+ percent of the global market.
As we have discussed before, NAND will continue to gain share in the memory market and to push DRAM out of the way. The process began quietly when solid state drives (SSDs) were slow out of the gate and pricing kept most consumers away. Then we began to hear about the next generation of NAND called “3D NAND.” Manufacturers were beginning to look past the standard 2D NAND in order to increase speed and durability and decrease power consumption – all thanks to an increase in the density of the chip. This process also began slowly until Samsung introduced the first V-NAND that began shipping SSDs with 32-nm V-NAND. Now it seems that most manufacturers are going all in for the next generation NAND, as a result, new developments are coming in rapidly. NAND is hot right now and everybody wants a piece of the pie.
All of this activity in the market should speed up improvements in the technology in 2015 and improve the quality and storage of the products that we all use every day. In the bigger picture, semiconductor sales increased 5.7 percent over last quarter. Since NAND is continuing to move towards being the world’s storage of choice, it is not too surprising that semiconductors are also growing on the global market. While economic data for different regions does not necessarily go along with the industry data, there is no doubt that electronic component sales will continue to grow.