Western Digital (NASDAQ:WDC) sold off significantly (12%) in the wake of the Thursday call, and for several very good reasons. I'm not going to discuss all the reasons why, but I do want to focus on several salient points that were brought out during the call because they relate strongly to the NAND industry, and most particularly to Micron (NASDAQ:MU) and (to a lesser degree) Samsung (OTC:SSNLF).

If you are following Micron or any of the four members of the NAND oligarchy (those being IMFT - Intel (NASDAQ:INTC) and Micron - the Flash Forward (FF) partners WDC and Toshiba (OTCPK:TOSYY), SK Hynix (OTC:HXSCF), and Samsung), the information revealed in the concall did a lot to lift the fog surrounding the relative competitive picture for the NAND business in calendar 2017. As anybody who has followed the industry knows, the roll-out of the 3D technology has been fraught with risk because of the immense CapEx investments required and the technical/operational risk of the migration. Each of the suppliers has had a distinct strategy, both in terms of the pace of the roll-out and the design of the 3D node.

I'm not going to get into the weeds of the technology in this forum, but all four players came up with a different 3D design. This fact alone injects a level of drama for investors who have looked for signs of emerging technical advantage as the 3D deployment continues. This is especially true against the backdrop of many industry observers opining that it was (and still is) quite possible that all the suppliers would struggle with the technology and one or more might fail outright. This is, after all, the first complete new industry process node in more than 35 years since the so-called flash memory was invented by Toshiba's Fujio Masuoka in 1980. Ever since its inception, NAND flash was produced using a planar (two-dimensional) process. 3D NAND breaks away from that design and production paradigm decisively; metaphorically, the industry has gone from producing single-story buildings to multi-story skyscrapers.

By: DocMemory
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