Demand for NAND flash memory remains robust due to the onslaught of data in systems, but the overall NAND flash market is stuck in the middle of a challenging period beset by product shortages, supply chain issues and a difficult technology transition.

Intel, Micron, Samsung, SK Hynix and the Toshiba/Western Digital duo continue to ship traditional planar NAND in the market, but this technology is reaching its physical limit at the current 1xnm node regime. So for some time, the same vendors have been developing and ramping up a next-generation technology called 3D NAND, which is used for storage applications like smartphones and solid-state storage drives (SSDs).

3D NAND is expected to reach the mainstream by year’s end, which is about two to three years later than expected. As it turns out, 3D NAND is more difficult to fabricate than previously thought. Unlike planar NAND, which is a 2D structure, 3D NAND resembles a vertical skyscraper, in which horizontal layers are stacked and then connected using tiny vertical channels.

Still, NAND flash vendors continue to convert a large percentage of their fab capacity from planar to 3D NAND. But the migration is taking longer and some vendors can’t bring up 3D NAND fast enough. A few are struggling to ship 3D NAND.

During this period, demand has exceeded supply for both planar and 3D NAND, causing a shortage of parts that started in July of 2016 and has extended until now. In fact, suppliers planned for 40% bit growth in the overall NAND market in 2017, but the current demand picture calls for about 45% bit growth this year, according to Objective Analysis.

“The shortages have become worse,” said Jim Handy, an analyst with Objective Analysis. “Everybody was planning for about 40% bit growth. They planned to reach that by building new capacity and by converting over to 3D NAND. The 3D NAND conversion has not gone as smoothly as anticipated. Because of that, production bit growth has not been able to keep pace with demand bit growth.”

Prices have been relatively flat for NAND, but the supply issues are far from over. “We are expecting to see shortages until the middle of 2018,” Handy said. “What we are looking at is how long it’s going to take for the last problem to be solved in order to make 3D NAND a cost effective part to build. Until that happens, we expect the shortages to grow more acute, because demand will continue to grow while production does not.”

In addition, there are other issues taking place in the NAND market today. Here are the main ones:

◦Suppliers are shipping their previous-generation 3D NAND parts, which involve 32- and 48-layer devices. But the current transition to the next iterations—64- or 72-layer 3D NAND devices—has been relatively difficult.

◦In R&D, suppliers are now working on the next products—96- and 128-layer 3D NAND. The complexity of these devices may force vendors to make some hard decisions and go down one of two paths. One is to scale 3D NAND, which is challenging. The other is a stacking technique that adds cost. Either way, the 3D NAND node cadence could extend from one to two years.

◦Toshiba, the world’s second largest NAND vendor, is looking to sell its memory unit amid financial troubles. Toshiba’s woes haven’t caused jitters in the supply chain—yet.

◦China is spending billions of dollars to get a larger foothold in the IC market, including the development of 3D NAND. China isn’t expected

By: DocMemory
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