The global price for NAND flash chips is estimated to fall 28 percent annually through 2018, data showed Monday, forcing stiffer competition among chipmakers, including industry leaders Samsung and SK hynix of South Korea.

The price for NAND flash chips is expected to reach US$0.49 per 1GB by the end of this year, compared to $0.71 last year, according to the data compiled by market tracker IHS iSuppli, with the price to fall through 2018 to $0.14.

The downward trend comes as the combined global shipment of NAND flash chips is set to soar over the cited period, helped by improved efficiency in production. Total output is set to reach 203.6 billion units in terms of 1-GB level by 2018, compared to 35.5 billion units in 2013.

Along with dynamic random-access memory (DRAM) chips, NAND flash memory chips are used in smartphones, tablet PCs and other mobile devices to save data when the devices are turned off.

The falling price and rising production will erode chipmakers' earnings as a whole, with their combined sales increasing 3.1 percent annually through 2018, according to data.

Accordingly, global chipmakers have been making efforts to beef up their competitiveness and expand investment.

Samsung Electronics Co., the world's biggest player, rolled out the industry's first third-generation V-NAND flash chip last week, which is said to have double the efficiency of previous versions.

The company invested $7 billion to build V-NAND facilities in China, which commenced their full-fledged production in May.

Toshiba Corp., which has been making strides to catch up to Samsung, recently decided to invest $6.8 billion to expand facilities for the production of V-NAND models.

The company, which first invented NAND flash chips in 1987, has sued SK hynix Inc. for 109.1 billion yen (US$1.07 billion) in damages over the alleged theft of flash memory-chip technology, a move which was seen by industry watchers as an effort to curb its rival.

Samsung has about 37.4 percent of the global NAND flash market, trailed by Toshiba with 31.9 percent and Mircon with 20.1 percent. SK hynix accounts for 10.6 percent.

SK hynix has also been tapping deeper into the NAND business, acquiring the firmware arm of Belarus-based Softeq Development FLLC in June. Firmware refers to a computer program embedded in hardware devices such as NAND flash controllers, which contributes to the product's speed and stability.

At end-May, SK hynix said it acquired the expansion card division of U.S. firm Violin Memory Inc., a move seen as increasing its competency in the NAND flash business.

By: DocMemory
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