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IHS Inc. : NAND Flash Moves into the Next Dimension, as 3-D Manufacturing Technology Overtakes the Market

10/03/2013 | 06:18am US/Eastern
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El Segundo, Calif. (Oct. 3, 2013)-With conventional semiconductor manufacturing technology soon to reach its limit in the NAND flash segment, suppliers of these memory chips are set to adopt 3-D production techniques in order to boost the capacity of their devices.

By 2017, nearly two-thirds-or 65.2 percent-of all NAND memory chips shipped worldwide will be produced using 3-D manufacturing processes, up from less than 1 percent this year, according to a Flash Dynamics brieffrom IHS Inc. (NYSE: IHS). The share of the overall NAND market accounted for by 3-D technology is set to jump to 5.2 percent in 2014, and then surge to 30.2 percent of total flash memory shipments in 2015. In 2016, 3-D NAND will enlarge its market share to 49.8 percent-representing about half of the entire flash memory market, as presented in the attached figure.

"There's widespread agreement that just one or two generations may be left before NAND flash made using conventional planar semiconductor technology reaches its theoretical limit," said Dee Robinson, senior analyst, memory and storage for IHS. "As lithographies shrink further, performance and reliability may become too degraded for NAND to be used in anything but the very lowest-cost consumer products. Because NAND suppliers are compelled to continue building products with higher densities and lower prices, they will migrate to 3-D manufacturing quickly in the coming years."

A major factor driving NAND makers to keep improving their products is demand from products like media tablets and smartphones. These devices are demanding higher capacity and less expensive storage of content, including pictures, music and video.

Another dimension of flash manufacturing

Historically, NAND flash makers have employed miniaturization to increase the capacity and reduce the costs of their products. Miniaturization is the process of shrinking the NAND flash cells with each successive technology generation, allowing suppliers to fit more bits on each silicon wafer.

With 3-D technology, the emphasis shifts away from miniaturization and toward increasing density by layering NAND flash cells on top of each other. This will be the most cost-effective way of pushing NAND to the next level because most of the existing manufacturing equipment can continue to be used, minimizing expenses while maximizing return on investment.

Invention dimension

Samsung and SK Hynix, the biggest players in the global memory trade, announced their initiatives in 3-D NAND in August during the Flash Memory Summit in Santa Clara, Calif.

Samsung said commercial production of V-NAND, the company's name for its 3-D flash memory products, started during the second quarter. The end product will be a V-NAND-based solid-state drive, in 480- and 960-gigabyte densities, initially targeting the enterprise market. V-NAND, Samsung says, will be more reliable than 1x-nanometer NAND, consume less power and also deliver higher performance in sequential as well as random writes.

The cost differential between a V-NAND solid-state drive and one powered by traditional flash memory will be quite large, IHS expects, which would explain why Samsung is aiming the product first at the enterprise market.

Samsung archrival SK Hynix is also planning to manufacture 3-D NAND; its initial 3-D product will be very similar to Samsung's V-NAND, to be available in 128-gigabyte capacity. But this is part of a two-pronged approach, as the company is also sampling a 16-nanometer product.

Market acceleration

While both Samsung and SK Hynix have previously mentioned internal development of 3-D NAND, the timeline for production has moved faster than expected, and the accelerated pace is much quicker than many in the industry had anticipated.

Other memory manufacturers, however, have decided to continue with planar NAND for at least one more generation, pushing any 3-D plans to a later date. In this group are makers like SanDisk of California, Idaho-based Micron Technology and Toshiba of Japan.

All told, initial production of 3-D NAND will be limited, and failure analysis will be difficult because of the multilevel structure of the device. Still, an initial ramp-up of higher-performing products into the enterprise segment will enable suppliers to generate margins and allow processes to mature, IHS believes, even though it may be some time before 3-D contributes meaningfully to overall industry bit growth.

At any rate, the 3-D race for NAND has already begun, solidifying the timeline for the new technology. NAND suppliers that have yet to address the change are likely to feel pressure to innovate as a result.

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About IHS (www.ihs.com)

IHS (NYSE: IHS) is the leading source of information, insight and analytics in critical areas that shape today's business landscape. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs approximately 8,000 people in 31 countries around the world.

IHS is a registered trademark of IHS Inc. All other company and product names may be trademarks of their respective owners. Copyright © 2013 IHS Inc. All rights reserved.

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