Analysis of the three major memories: DRAM, NAND FLASH, and NOR FLASH

Source: ittbank

The official name of memory is "storage", which is one of the three pillars of the semiconductor industry. In 2016, the global semiconductor market size was 340 billion US dollars, and memory accounted for 76.8 billion US dollars. For all electronic products around you, such as mobile phones, tablets, PCs, notebooks, etc., memory is like steel to modern industry, and is a veritable "raw material" of the electronics industry.

In the field of memory chips, there are two main categories: volatile and non-volatile. Volatile: After power failure, the information in the memory is lost. For example, DRAM is mainly used as PC memory (such as DDR) and mobile phone memory (such as LPDDR), each accounting for 30%. Non-volatile: After power failure, the information in the memory still exists, mainly flash memory (Nand FLASH and NOR FLASH). NOR is mainly used in code storage media, while NAND is used for data storage.

1) DRAM

Dynamic random access memory (Dynamic RAM), the word "dynamic" means that it needs to be refreshed and charged every once in a while, otherwise the internal data will disappear. This is because the basic unit of DRAM is a transistor plus a capacitor, and the charge or absence of the capacitor is used to represent the digital information 0 and 1. The capacitor leaks very quickly. In order to prevent the capacitor from leaking and causing errors in reading information, the DRAM capacitor needs to be charged periodically, so DRAM is slower than SRAM.

On the other hand, this simple storage mode also makes DRAM much more integrated than SRAM. A DRAM storage unit only needs one transistor and a small capacitor, while each SRAM unit needs four to six transistors and other parts. Therefore, DRAM has advantages over SRAM in terms of high density (large capacity) and price. SRAM is mostly used in places with extremely high performance requirements (such as the first and second level buffers of the CPU), while DRAM is mainly used in computer memory bars and other fields.

Figure: DRAM device unit diagram and cross-sectional structure diagram of different capacities

Every upgrade of DRAM process requires a lot of investment. For example, the upgrade from 30 nm to 20 nm process requires 30% more photolithography masks, doubles the number of non-photolithography process steps, and increases the clean room plant area by more than 80% with the increase in the number of equipment. Previously, these costs could be offset by the premium brought by more chip output and performance per wafer, but with the continuous miniaturization of the process, the gap between increased costs and revenues has gradually narrowed. Therefore, major manufacturers began to study the expansion capabilities in the Z direction. Samsung was the first to realize 3D DRAM from a packaging perspective, using TSV packaging technology to stack multiple DRAM chips, thereby greatly improving the capacity and performance of a single memory stick.

Figure: Global market size of DARM

2) NAND Flash and NOR Flash

In order to better explain the two major storage products, NAND Flash and NOR Flash, let us first understand Flash technology. Flash memory: also known as flash memory, it is a non-volatile memory. The storage unit of flash memory is a field effect transistor, a voltage-controlled three-terminal device consisting of a source, a drain, a gate, and a substrate. There is a silicon dioxide insulating layer between the gate and the silicon substrate to protect the charge in the floating gate from leaking. NAND's erasing and writing are both based on the tunnel effect. The current passes through the insulating layer between the floating gate and the silicon substrate to charge (write data) or discharge (erase data) the floating gate. NOR erases data based on the tunnel effect (current from the floating gate to the silicon substrate), but when writing data, it uses hot electron injection (current from the floating gate to the source).

Figure: Schematic diagram of the structural unit of Flash memory

NAND Flash is the most important product in flash memory at present, with the advantages of non-volatility, high density and low cost. In NAND flash memory, data is stored in memory cells in bits. One cell stores one bit. These cells are connected into bit lines in units of 8 or 16, and these lines are combined to form pages. NAND flash memory reads and writes data in pages and erases data in blocks. Therefore, although its writing and erasing speed is about 3-4 orders of magnitude slower than DRAM, it is 3 orders of magnitude faster than traditional mechanical hard disks. It is widely used in eMMC/EMCP, USB flash drives, SSDs and other markets.

The characteristic of NOR Flash is on-chip execution (XIP, Execute In Place), that is, the application does not need to read the code into the system RAM, but can run directly in the Flash memory. NOR has high transmission efficiency and much faster reading speed than NAND. It is very cost-effective at a small capacity of 1~4MB. However, its erasure is performed in units of 64-128KB blocks, and it takes 5s to perform a write/erase operation, while the erasure of NAND devices is performed in units of 8-32KB blocks. It only takes 4ms at most to perform the same operation, so its very low write and erase speed greatly affects its performance. In addition, the unit size of NOR is almost twice that of NAND flash, so it does not have an advantage in cost, which makes the scope of use of NOR more limited. Many markets that once belonged to NOR have been slowly taken over by other memories, but NOR flash manufacturers have not sat idly by, but actively explored the Internet of Things market such as automotive electronics. In recent years, the market size of NOR flash has continued to shrink.

Semiconductor memory is a highly monopolized market, especially its three major mainstream products DRAM, NAND Flash, and NOR Flash. Especially the first two, the global market is basically occupied by the top three companies, and the degree of monopoly has gradually intensified in recent years. Taking DRAM and NAND as two major memory chips, the DRAM market is occupied by Samsung, Hynix of South Korea and Micron Technology of the United States, while the NAND Flash market is almost entirely divided by six companies, including Samsung, Hynix, Toshiba, SanDisk, Micron and Intel. Among them, Samsung has a monopoly position, with its DRAM accounting for 45.8% of the world and NAND accounting for 37% in 2017.

After decades of cycles in the DRAM field, the number of players has gradually decreased from 40 to 50 in the 1980s to five before the financial crisis in 2008, namely: Samsung (South Korea), SK Hynix (South Korea), Qimonda (Germany), Micron (USA) and Elpida (Japan). These five companies basically control the global DRAM supply. End product manufacturers such as Kingston have almost no DRAM production capacity and have to purchase raw materials from them. According to common sense, the situation has stabilized and the price war should have died down. Unfortunately, the Koreans did not agree, especially Samsung.

Samsung took full advantage of the strong cyclical characteristics of the memory industry and relied on government transfusions to expand production against the trend when prices fell, production was oversupplied, and other companies cut investment. It further cut product prices through large-scale production, thus forcing competitors to exit the market or even go bankrupt. People call this the "counter-cyclical law." In the field of memory, Samsung has used the "counter-cyclical law" three times. The first two times occurred in the mid-1980s and early 1990s, allowing Samsung to start from scratch and become the leader in memory. But Samsung obviously felt that it was not big enough, so around the 2008 financial crisis, it raised the "counter-cyclical" knife for the third time.

In early 2007, Microsoft launched the memory-hungry Vista operating system. DRAM manufacturers judged that memory demand would increase significantly, so they increased production capacity. As a result, Vista sales fell short of expectations, DRAM oversupply and prices plummeted. The 2008 financial crisis made matters worse, and DRAM chip prices plummeted from US$2.25 to US$0.31. At this time, Samsung made a jaw-dropping move: it invested 118% of Samsung Electronics' total profit in 2007 in DRAM expansion business, deliberately exacerbating industry losses and adding the last straw to its struggling competitors.

The effect was remarkable. DRAM prices plummeted, falling below cash costs in mid-2008 and below material costs at the end of 2008. In early 2009, the third-ranked German manufacturer Qimonda was the first to collapse and declared bankruptcy, and the memory players on the European continent disappeared. In early 2012, the fifth-ranked Elpida declared bankruptcy, and Japan, which once occupied more than 50% of the DRAM market, also lost its last card. On the night of Elpida's bankruptcy, Samsung's headquarters in Gyeonggi Province was lit all night, and the stock price soared the next day. The whole world knew that the Koreans had won again this time.

At this point, there are only three players left in the DRAM field: Samsung, Hynix and Micron. The mess after Elpida's bankruptcy was bought by Micron, which had a new CEO in 2013, for more than 2 billion US dollars. 2 billion US dollars is really a bargain price. Five years later, Micron's market value rose from less than 10 billion US dollars to 46 billion US dollars. 2 billion US dollars is almost the amplitude of its market value in one day.

On May 31, several media outlets reported that China's antitrust agency sent several working groups to investigate and collect evidence at the offices of Samsung Electronics, SK Hynix, and Micron in Beijing, Shanghai, and Shenzhen. In fact, since the National Development and Reform Commission's Price Inspection Bureau interviewed Samsung last year, rumors have been circulating that China's antitrust agency is about to file a case to investigate Samsung, Micron, and Hynix's DRAM (dynamic random access memory) monopoly. The Chinese antitrust agency's investigation into the three offices also means that the antitrust investigation against the three companies has officially started.

Data shows that in the global DRAM market, three companies account for more than 90% of the market share. As the world's largest electronic product manufacturing base and the largest consumer of memory chips, China has been affected by the price increase of memory chips. The price of imported memory chips has continued to rise in the past two years. Previously, the antitrust department had interviewed relevant companies about the continuous price increase. It is reported that the three companies' behavior that hinders fair competition and the complaints of some companies are the important reasons for the Chinese antitrust agency to launch an investigation.

This was not the beginning of the incident. Half a year before the raid, at the end of December 2017, a Chinese mobile phone manufacturer reported Samsung Electronics to the National Development and Reform Commission due to rising memory prices and poor supply. Subsequently, the National Development and Reform Commission launched an investigation.

At the end of 2017, the NDRC first summoned the head of Samsung Electronics' China market to understand the situation. At that time, DRAM was experiencing a record-breaking seven-quarter increase, which brought huge pressure to both downstream companies and consumers. The NDRC said at the time that it had noticed the surge in DRAM industry prices and would pay more attention to problems that may be caused by "price manipulation" in the industry in the future. There may be multiple companies acting in concert to push up chip prices and seek to maximize profits.

In May this year, China's antitrust agency interviewed Micron, the world's third largest memory manufacturer, to investigate whether Samsung Electronics, SK Hynix, and Micron of the United States jointly manipulated DRAM prices. At the same time, Micron was suspected of restricting equipment suppliers from supplying Fujian Jinhua, abusing its dominant market position and hindering fair competition.

Industry analysts pointed out that since the DRAM production cycle is more than eight weeks, and it takes at least one year from capital expenditure to the addition of new production capacity and particle output, DRAM manufacturers are most likely to be investigated for "restricting the sales quantity of goods" under the antitrust provisions.

The reporter learned that last year, Samsung Electronics, SK Hynix and Micron Technology accounted for a combined 96% of the global DRAM market share. In fiscal 2017, the three companies' semiconductor business revenue in China was US$25.386 billion, US$8.908 billion and US$10.388 billion, respectively, totaling US$44.68 billion, a year-on-year increase of 39.16% from US$32.1 billion in fiscal 2016.

Earlier in the second half of 2016, DRAM prices began to rise continuously. In April and May of this year, a lawsuit was filed by American consumers against Samsung Electronics, SK Hynix, Micron Technology and other manufacturers for artificially manipulating retail prices. The plaintiffs stated that the actions of the above three companies caused the price of 4G memory to rise by 130% between July 1, 2016 and February 1, 2018.

Data shows that the price of 4GB DRAM memory increased by 130% from June 1, 2016 to February 1, 2018. In 2017 alone, the price of DRAM memory increased by 47%, the largest increase in nearly 30 years.

Against the backdrop of declining mobile phone shipments in the entire Chinese market, China imported $88.921 billion worth of memory chips in 2017, up 39.56% from $63.714 billion in 2016. The investigation by China's antitrust agency came at the crossroads of the Sino-US trade war. Samsung Electronics and SK Hynix are both Korean companies, while Micron is an American company. China's intention in this move is very clever.

At the same time, it is worth noting that if there is price monopoly behavior, domestically, according to the Anti-Monopoly Law and the Anti-Price Monopoly Regulations, if the market behavior of the operators from 2016 to the present is taken into account and the sales volume in 2016-2017 is used for punishment, the three companies will face fines of US$800 million to US$8 billion.

China's three major memory camps take shape: Yangtze Memory Technologies, Fujian Jinhua, and Hefei Changxin take the lead

In the first quarter of 2018, Samsung, Hynix, and Micron accounted for a total of 95.4% of the DRAM market share, while Chinese storage manufacturers still had zero share in the market. Currently, my country's storage field has formed three major camps, including Yangtze Memory, which develops NAND Flash, Hefei Changxin, which focuses on mobile memory, and Fujian Jinhua, which is committed to niche memory. It is worth noting that this year will be a key node in the development of China's storage industry, so what is the current progress of the three manufacturers?

Yangtze Memory Technologies

Yangtze Memory Technologies was formally established on July 26, 2016 on the basis of Wuhan Xinxin Integrated Circuit Manufacturing Co., Ltd. Its major shareholders include the National Science and Technology Fund, Tsinghua Unigroup, Hubei Provincial Science and Technology Investment, and Hubei Guoxin Industry Investment Fund. It is currently a subsidiary of Tsinghua Unigroup. As a national-level storage project base, Yangtze Memory Technologies has a total investment of US$24 billion. It is expected that after the completion of the first phase of the project, the total production capacity will reach 300,000 pieces per month, and the annual output value will exceed US$10 billion.

At present, the first batch of precision instruments worth 4 million US dollars of Yangtze Memory has arrived in Wuhan on April 5. In the next two years, nearly 30,000 tons of precision instruments will be imported from many places around the world to Wuhan. On April 11, the chip production machines of Yangtze Memory Wuhan Base were officially installed, which marked that the national memory base has entered the mass production preparation stage from the plant construction stage. It is understood that it will take about 3 months to move in and debug the equipment, and then start small-scale trial production. If all goes well, China's first batch of 32-layer three-dimensional NAND flash memory chips with completely independent intellectual property rights are expected to be mass-produced in Optics Valley in the fourth quarter of this year.

It is worth mentioning that the equipment moved in that day was only the first one. Subsequently, various high-precision chip production machines will be moved in from all over the world for debugging, with a total of more than 2,000 machines. Only after the equipment debugging is completed can the chips be mass-produced.

In addition, on May 19, Yangtze Memory's first lithography machine arrived at Wuhan Tianhe Airport. After the relevant customs, commodity inspection and border port procedures for the equipment are completed, it can be transported to Yangtze Memory's factory. This lithography machine is ASML's 193nm immersion lithography machine, priced at US$72 million, and is used for 14nm~20nm processes. This also indirectly reveals the process technology of Yangtze Memory's 3D NAND flash memory chips. This is Yangtze Memory's first lithography machine, and more will be delivered in succession.

At the same time, Zhao Weiguo, Chairman of Tsinghua Unigroup and Chairman of Yangtze Memory, stressed that based on the completion of the production plant last September, one month ahead of schedule, and the major breakthrough in the independent research and development of 32-layer three-dimensional NAND flash memory chips, we have now moved in the chip production machines 20 days ahead of schedule. In the next ten years, Tsinghua Unigroup plans to invest at least US$100 billion, equivalent to an average annual investment of US$10 billion.

Gao Qiquan, global executive vice president of Tsinghua Unigroup and executive chairman of Yangtze Memory Technologies, revealed that Yangtze Memory Technologies' 3D NAND flash memory has received its first order, totaling 10,776 chips, which will be used in 8GB USD memory card products.

By the end of this year, the base will realize small-scale mass production of domestic 3D flash memory, and it won’t be long before we can see smartphones and SSD solid-state drives based on domestic flash memory. Next year, Yangtze Memory will also start 64-layer stacked flash memory, with a single capacity of 128Gb (16GB).

According to a memory storage research (DRAMeXchange), judging from the development progress of Chinese manufacturers' NAND Flash, at the end of December 2016, the National Memory Base led by Yangtze Memory officially broke ground. The official expected to be divided into three phases, with a total of three 3D NAND Flash plants. The first phase of the plant was completed in September 2017, and it is scheduled to start moving in machines in the third quarter of 2018 and conduct trial production in the fourth quarter. The initial investment will not exceed 10,000 pieces, which will be used to produce 32-layer 3D NAND Flash products. It is expected that after the company's own 64-layer technology matures, the second and third phases of production plans will be formulated depending on the situation.

Of course, Yangtze Memory also attaches great importance to talent. Peng Hongbing, former deputy director of the Electronic Information Department, has been appointed as vice president of the Big Fund and chairman of the Yangtze Memory Supervisory Board.

In addition, according to Nikkei Chinese website, there is a newly established company in Kawasaki City, Japan called JYM Technology Co., Ltd., which is actually Yangtze Memory Technologies Co., Ltd. (YMTC). Relevant sources revealed that the area of ​​the Kawasaki City base can accommodate 100 people, and recruitment activities have just been launched in Japan. At the same time, Yangtze Memory Technologies Co., Ltd. opened a research and development base in Silicon Valley, USA in the fall of 2016, poached technical personnel from memory giant Micron Technology, and started research and development work with a scale of 40 people.

Fujian Jinhua

Fujian Jinhua Integrated Circuit Co., Ltd. (JHICC for short) was jointly established by Fujian Electronic Information Group and the governments of Quanzhou and Jinjiang, and was included in my country's "13th Five-Year Plan" major integrated circuit productivity layout plan.

According to the plan, the project construction will be completed in June and officially put into production in September. It is expected that the first phase of the project after production will be able to achieve a monthly production capacity of 60,000 12-inch wafers.

Jinhua project progress:

The Jinhua project promotional video points out that Jinhua takes Samsung Hynix and other industry giants as benchmarks and strives to catch up with the industry's leading manufacturing technology through independent research and development. Compared with similar domestic projects, the Jinhua project has a significant advantage in construction progress and is expected to become the first domestic memory leader with independent technology.

It is reported that Jinhua Integrated Circuit has adopted a combination of domestic and overseas talent recruitment and talent training in terms of its talent team. According to the plan, the talent team will reach 1,200 people in 2018, and more than 800 people have been recruited so far.

As the integrated circuit industry foundation in Jinjiang is relatively weak, Jinjiang City has taken the Jinhua project as the leader to build a "three parks and one zone" industrial development space carrier, creating an integrated circuit full industry chain ecosystem of design, manufacturing, packaging and testing, equipment and materials, and terminal applications, with the goal of forming an industry scale of 100 billion by 2025. It is reported that more than 20 industry chain projects such as Taiwan Siliconware Precision Industries, Taiwan G.SKILL, and Air Products and Chemicals have landed in Jinjiang, with a total investment of nearly 60 billion yuan, and the industry chain ecosystem is gradually taking shape.

The Taiwan Siliconware Precision Industries Co., Ltd., which is under construction, is located opposite Jinhua Integrated Circuit Co., Ltd. and will focus on DRAM packaging and testing business.

Hefei Changxin

Ruili Integrated Circuit Co., Ltd. is a joint venture between Beijing GigaDevice and Hefei Industrial Investment Holding Group, with GigaDevice investing 20%. The company mainly develops 19nm process 12-inch wafer DRAM, with the goal of successfully developing it by the end of December 2018.

Currently, the Hefei Changxin 12-inch memory wafer manufacturing base project is in the stage of accelerated construction. Once the project is officially put into production, it is expected to occupy about 8% of the global DRAM market share, thus filling the gap in domestic DRAM memory in the domestic market.

It is worth mentioning that at a public event in April this year, Wang Ningguo, Chairman of Changxin Memory Technologies Co., Ltd. and CEO of Ruili Integrated Circuit Co., Ltd., made his first high-profile appearance and introduced the five-year plan of the Hefei Changxin Memory Project: the construction of the first plant was completed in January 2018, and equipment installation began; 8Gb DDR4 engineering samples were mass-produced at the end of 2018; 8Gb LPDDR4 was mass-produced in the third quarter of 2019; a production capacity of 20,000 pieces/month was achieved by the end of 2019; planning for the construction of the second plant began in 2020; and 17nm technology research and development was completed in 2021.

Wang Ningguo expressed the hope that the first DRAM chip independently developed by China could be born in Hefei by the end of 2018. At the same time, Wang Ningguo revealed that Changxin Ruili has signed a contract with North Huachuang and will sign contracts with more domestic equipment and material manufacturers in the future.

According to Taiwanese media Digitimes, the 300 R&D equipment required for Hefei Changxin's 12-inch memory wafer manufacturing base are basically in place. After the installation is completed, it will be fully invested in trial production from the second half of 2018.

Meanwhile, according to TrendForce DRAMeXchange, the plant of Changxin Hefei was completed in June 2017, and began to move in test machines in the third quarter. Since Changxin Hefei is directly targeting LPDDR4 8Gb, one of the most important products of the three major DRAM manufacturers, it is more likely to face patent disputes in the future. In order to avoid this situation, in addition to actively accumulating patents, it may initially focus on sales in China.

In addition, news on May 9 showed that Rambus, a US semiconductor technology supplier, and GigaDevice established a joint venture, Hefei Ruike Microelectronics Co., Ltd., and completed a round A financing led by Tsinghua Holdings Ginkgo. The new joint venture is committed to the commercialization of resistive random access memory (RRAM) technology and will bring the next generation of memory technology to the market. At the same time, Chinese capital will play a leading role in this cooperation. People familiar with the matter said that the company's total investment is 50 million US dollars.

Although GigaDevice and Rambus have only signed an agreement, the joint venture has not yet been established. As for the specific time of establishment, since the joint venture needs to be approved by the United States, the company registration and specific establishment time will need to wait until approval is obtained.

"Xinshiye's media"