NAND flash prices drop
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James Carbone -- Purchasing, 5/18/2006 2:00:00 AM
NAND flash memory will remain a buyer's market for the rest of the year as more capacity comes online to meet rising demand.
Prices for NAND flash fell by 30-40% in the first quarter depending on the density and further price erosion is likely, although not at the same rate.
Despite falling prices, the NAND flash memory market will grow 40% in 2006 to $14.8 billion. In fact, the NAND flash segment will have a compound annual growth rate of 31% through 2010 when the market will reach $33.4 billion, says researcher IC Insights.
Prices are falling because capacity still outpaces supply despite booming demand. Suppliers are competing fiercely for market share and new suppliers are entering the market or beefing up NAND capacity.
"As a result, it will be a buyer's market throughout this year. Buyers will have a lot of say on prices on a contract basis and on the spot market," says Brian Matas, an analyst for IC Insights.
Falling prices are generating a lot of demand for NAND flash. Because prices are low, more electronics equipment is using flash.
"With growing demand, more suppliers are jumping into the market to take advantage of the opportunity," says Matas. For instance, Hynix started making flash last year "swapping over some DRAM capacity to flash," says Matas.
Intel and Micron are working together on a joint venture called IM Flash. Infineon is expected to produce more NAND flash memory later this year and next year. "Toshiba and SanDisk are ramping up more production and so is Samsung," says Matas.
NAND production is being ramped because it is being used in a wide variety of equipment including cell phones, digital music players such as Apple's iPod devices, USB drives, medical equipment, vehicles, industrial controls, consumer electronics equipment and memory cards.
Suppliers say cell phones will use more NAND flash. "With flash, cell phones traditionally have been dominated by NOR, but in the last three years NAND is a more viable solution for cost performance and density," says Michael Yang, flash marketing director for Samsung in San Jose, Calif. "More cell phone makers are adopting NAND flash and flash for their phones. We have a high run rate of 256-megabit (Mb) and 512Mb flash products because the devices are being used in cell phones," he says.
According to Yang, more phones are equipped with multimedia functions which require high density NAND rather than NOR. "NAND flash is more suited for pictures, songs and other multimedia type of data that is proliferating in cell phones," he says.
Scot Nelson, business development director, for Toshiba in Irvine, Calif., says that cell phones are an emerging application for NAND.
"NAND excels at multimedia functions requiring high density storage," says Nelson. He says in some cases, NAND will replace NOR in cell phones.
Many cell phones have multichip packages with various types of memory. Multi chip package technology is moving toward NAND and synchronous DRAM rather than pseudo static RAM, NOR and SDRAM, says Nelson.
Some memory IC manufacturers are providing flash technology that feature the best characteristics of NOR and NAND for cell phone manufacturers. NOR provides fast reads but it writes data slowly. NAND reads data slowly, but has fast write speeds. Some suppliers have developed flash architectures that have both NOR and NAND capabilities on a single chip. Examples include Samsung's OneNAND and Spansion's ORNAND technologies.
"We use our MirrorBit technology and produce two different architectures so customers don't have to make a choice of code architecture or data architecture," says John Nation, director of corporate marketing for flash supplier Spansion in Santa Clara, Calif. "They get the best of both worlds. They get Mirrorbit NOR code solution and ORNAND for data solutions. We can combine both of them in a single package depending on the mix for code and data."
Samsung's OneNAND technology allows high density NAND flash to use a NOR interface. OneNAND can achieve 108 MB/s of sustained read performance.
Higher densities of flash will be used in handsets as more phones ship with multimedia functions and as prices for NAND fall. Yang says that Samsung has been shipping 256 Mb and 512 Mb flash chips for cell phones, but demand is now transitioning to more 512 Mb and 1 gigabit NAND flash devices.
Besides cell phones, digital music players will also help drive NAND flash demand. In fact, the success of Apple iPod devices will eat up a lot of NAND flash capacity over the next three years.
"iPod was the trigger that got the market going. It caught the interest of major semiconductor players who were sitting on the sidelines," says Matas.
The success of iPods and the announcement by Apple it would use NAND flash in the devices encouraged Intel and Micron to begin its flash memory venture called IM Flash.
Apple prepaid $500 million to the companies to make sure it got its share of the chips from the venture. In fact, the prepayment was only part of a $1.25 billion commitment Apple made with five chipmakers including Hynix, Toshiba and Samsung.
Besides emerging applications and falling prices, another key trend is the transition to multilevel cell NAND devices, according to IC Insights. Multilevel cell (MLC) stores two bits of data per memory cell so there is a density advantage, which means a lower cost. But there are drawbacks. MLC face reliability issues related to charge leakage which could result in the reading of a wrong value due to narrower charge ranges assigned to each logic value, says Matas.
Another drawback is performance. With fewer bits per cell, SLC chips can program and erase information three to six times faster than MLC devices. Endurance is another problem with MLC. MLC devices are rated for about 10,000 cycles compared to about 100,000 for SLC, Matas says.
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