We are all drowning in the sea of data in the era of information explosion. The applications of IoT, AI, machine learning, big data and cloud computing all bring up the demand of storage capacity. According to Mordor Intelligence, in 2020 the NAND Flash memory market reached USD 46.62 billion, and will continuously grow with a CAGR of 11.27% to hit USD 85.36 billion by 2026. This article aims to give an overview of both the demand and supply of NAND Flash market.
SSDs (Solid State Drives) and smartphones are the key drivers to fuel NAND Flash market. Briefly speaking, SSD applications account for more than half of NAND Flash bit demand, and smartphones account for around one quarter of it. To address more, PC SSD and Enterprise SSD are the two largest portions in SSD applications, in 2020, they account for 52% and 45% of total SSD market revenue, respectively. Same in 2020, SSD market revenue was around USD 34.86 billion from Mordor Intelligence. Mordor Intelligence also predicts the continuous growth in SSD market; it estimates a revenue of USD 80.34 billion by 2026 with a CAGR of 14.94%.
With fast read-write speed, less power consumption and convenient portability, SSDs are considered to be suitable for enterprise applications. SSDs are foreseeing an optimistic future as the demand increases rapidly. SSDs are great for replacing HDDs in data centers, being applied to various kinds of cloud platforms. It can be expected that more premier series of SSDs with more NAND Flash equipped will be adopted in the industry as well. The ordinary SSD interfaces are SATA (Serial ATA), PCIe (PCI Express) and SAS (Serial Attached SCSI).
For smartphone market, it is projected by Gartner that the shipments will have a 11.4% growth and exceed 1.5 billion units in 2021, which are close to the numbers in 2019. Gartner’s projection shows that this growth is boosted by strong demand such as 5G development and iPhone 12 launch, and of course, the recovery from COVID-19 pandemic. Although the pandemic is still raging, consumers and suppliers seem to have managed to deal with the business.
|Africa and Middle East
In Gartner’s prediction, 5G smartphones will account for around 35% of global smartphone shipment volume in 2021, rising from 15% in 2020. Overall speaking, the average storage capacity of premium, basic, and utility smartphones in 2020 is 158 GB, 104.9 GB, and 79.8 GB, respectively. Basic smartphones occupy almost 45% of the total smartphone shipments, premium smartphones around 40%, and utility smartphones around 15%. The storage capacity is estimated to continuously grow with a CAGR of more than 20% in the following 5 years.
Therefore, in the market of smartphones, both the shipment quantity and the storage capacity are foreseen to have a significant increase in 2021.
|5G / Total Smartphones (%)
In summary, the demand of SSDs and smartphones will continuously be rising enormously this year, which has already caused a shortage of NAND Flash memory in early 2021.
The main suppliers of NAND Flash as known include Samsung, SK Hynix, Micron, Intel, Kioxia (spun off from Toshiba), and Western Digital. The NAND memory and storage business of Intel was acquired by SK Hynix by USD 9 billion, while Kioxia and Western Digital have a joint-venture partnership with more than 20 years. In Q4 2020, Samsung occupies 32.9% of the NAND Flash market share, Kioxia 19.5%, Western Digital 14.4%, SK Hynix 11.6%, Micron 11.2%, and Intel 8.6%.
Since NAND Flash supply has hit its rock bottom in 2020, analysts and suppliers are expecting a market rebound in 2021; Gartner has estimated that the wafer amount will have a 6% increase this year comparing to 2020. In 2020, Enterprise SSD contributed the most NAND Flash profit for Samsung, Micron and Intel; PC SSD contributed the most NAND Flash profit for Western Digital; for SK Hynix and Kioxia, Smartphone, Enterprise SSD and PC SSD contribute the NAND Flash profit evenly. In prediction, SSD will remain the most profitable end product for suppliers in 2021.
For product development, each supplier will still keep up with technology progressing. Samsung will increase the production and shipments of V6 (128L) process, while current main products are based on V5 92L process. Kioxia and Western Digital will migrate to 112L BiCS5 products gradually, while the main focus of both Kioxia and Western Digital are currently 96L BiCS4 products. SK Hynix and Micron have already announced their 176L products in Q4 2020 and will surely raise the allocation of them. Besides, the dominant products of SK Hynix are based on 72L and 96L processes. For Intel, it has already applied its 144L products to Intel SSD 670p (QLC), D5-P5316 (QLC) and D7-P5510 (TLC).
Moreover, in terms of capacity, Samsung will continuously expand production capacity depending on market conditions. It not only ramps the wafer output from Xi’an Fab 2, but also prepare to start producing 100-layer class V-NAND Flash at its Pyeongtaek plant. Kioxia and Western Digital are collaborating with each other to build the Fab 7 in Yokkaichi and K2 in Kitakami. SK Hynix and Micron will be comparatively conservative on capacity expansion but focus more on technology transition. They will keep growing the portion of 128L products, and Micron will start to provide samples of 176L products to OEMs in Q2 2021. Other than that, since the memory business of Intel is in the process of transition to SK Hynix, there will be no aggressive capacity expansion anymore.
What is worth mentioning is that Chinese NAND Flash maker Yangtze Memory Technologies will double the monthly output and aim to occupy 7～8% of global NAND Flash output in 2021. Also, in this year, Yangtze Memory Technologies will jump to develop 192L products directly, while 64L and 128L products are the current processes.
|Product Development Plan
|Capacity Expansion Plan
|Increases the production and shipments of V6 (128L) process
|Ramps the wafer output from Xi’an Fab 2, and prepares to start producing 100-layer class V-NAND Flash at Pyeongtaek plant
|Both migrate to 112L BiCS5 products gradually
|Collaborate with each other to build the Fab 7 in Yokkaichi and K2 in Kitakami
|Has announced 176L products
|Keeps growing the portion of 128L products
|Has announced 176L products
|Keeps growing the portion of 128L products and starts to provide samples of 176L products to OEMs in Q2 2021
|Has applied 144L products to Intel SSD 670p (QLC), D5-P5316 (QLC) and D7-P5510 (TLC) already
|Has no aggressive capacity expansion plan
|Yangtze Memory Technologies
|Will jump to develop 192L products directly
|Will double the monthly output
In brief, strong demand is seen by the NAND Flash market, and multiple suppliers have already started process migration and capacity expansion. However, the delivery schedule of NAND Flash is depending on the supply of controller ICs, which its capacity is now seriously insufficient.
NAND Flash memory market is estimated to hit USD 85.36 billion by 2026, growing from USD 46.62 billion in 2020, according to Mordor Intelligence. With strong demand of SSDs and smartphones with 5G development, the market is currently facing a shortage. On the other hand, although several NAND Flash suppliers are working very hard to expand the capacity, the delivery schedule remains unclear since the controller ICs are still in short supply.
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