NAND Flash is out of stock and prices are rising. Where are the opportunities for SLC NAND's "gorgeous turnaround"?

After the 7.3 magnitude earthquake off the coast of Fukushima, Japan, Japanese semiconductor manufacturers have reduced product supply due to production interruptions, which has affected the current tight supply in the NAND Flash market, which may cause NAND Flash quotations to increase further than before.

The shortage and price increase of NAND Flash is a microcosm of the current semiconductor industry. In recent years, memory chips have always been a category of products with a relatively large market share in the integrated circuit market. In 2018, memory chips accounted for 40.21% of the global integrated circuit market size, becoming the branch with the highest sales share in the global integrated circuit market.

What is the current status of the NAND Flash industry in the context of global chip shortages and price increases? As consumer demand for large-capacity 3D NAND increases, will SLC NAND's market share be further squeezed or even replaced? How can domestic manufacturers help SLC NAND complete a "gorgeous turnaround" under the strategic adjustments of international manufacturers?

Differences in underlying design

In 1989, Toshiba launched the NAND Flash architecture, opening a new chapter in the storage field.

As a non-volatile memory chip, NAND Flash has the characteristics of large storage capacity and fast write/erase speed, which makes it very suitable for storing information. Once it came out, it was widely used in communication equipment, consumer electronics, automotive electronics and other fields. NAND Flash can be divided into the following categories based on product design, namely planar SLC NAND, MLC NAND, TLC NAND, QLC NAND and three-dimensional 3D NAND.

As shown in the figure above, the differences between SLC (Single-Level Cell, SLC) NAND and NOR FLASH are as follows.

In NOR flash memory, one end of each memory cell is connected to the source line, and the other end is directly connected to the bit line similar to the NOR gate. In NAND flash memory, several memory cells (usually 8 cells) are connected in series, similar to the NAND gate. On the one hand, compared with NOR flash memory, NAND flash memory has a smaller cell size and higher write and erase speed.

On the other hand, NAND Flash has a much higher density compared to NOR Flash, mainly due to its lower cost per bit. NAND Flash typically has a capacity of 1Gb to 16Gb. Due to its higher density, NAND Flash is mainly used in data storage applications.

When SLC NAND was first introduced, each cell stored 1 bit of information, which means there were only two voltage changes: 0 and 1. The structure was simple and the voltage control was fast. The characteristics reflected in it were long life, strong performance, and an erase and write life of up to 100,000 times. The information stored in each cell of MLC, TLC, and QLC increases in sequence, and the voltage change increases exponentially with the increase of stored information, but the corresponding P/E life decreases accordingly.

Whether it is SLC NAND or the other three types of NAND, they all have "scaling limitations of flash memory". In order to break the shackles of "scaling limitations of flash memory" and provide high-capacity, low-cost NAND Flash, many companies have developed and solved a variety of solutions, including 3D NAND. Planar NAND is composed of horizontal strings of storage cells, while in 3D NAND, the storage cell strings are stretched, folded and vertically erected in a U-shaped structure, and the cells are stacked vertically to scale the density. The 3D NAND storage cell is similar to a tiny cylindrical structure. The tiny cell is composed of a vertical channel in the middle, and the middle is the charge layer inside the structure. By applying voltage, electrons are brought into and out of the insulating charge storage film, and the signal is read.

Taking Samsung as an example, it migrated from a floating gate structure to a charge trap flash memory (2D CTF), transformed the 2D CTF memory cell into a 3D CTF memory cell, and finally gradually increased the number of memory cell layers through process technology improvements, piling up the memory cells higher and higher like building a building.

SLC NAND and 3D NAND, which one is stronger?

"The different underlying structural designs of SLC NAND and 3D NAND determine the difference in product performance." A senior person in the storage industry pointed out, "SLC NAND can be erased 100,000 times on a 38nm process, but 3D NAND cannot achieve the same high reliability of erasing as SLC NAND due to its structure."

The underlying design of SLC NAND products determines that it has higher reliability and longer service life than other NAND products. It is an ideal choice for new generation automotive, industrial and Internet of Things applications. It can provide an ideal solution for applications that work in harsh environments, have large temperature differences, and require long-term stable and reliable operation.

Due to yield considerations, NAND flash memory comes with scattered bad blocks, and as erase and program cycles continue throughout the life cycle of NAND flash memory, more memory cells become bad. Therefore, bad block handling is a mandatory function of NAND flash memory.

Another aspect of reliability is data retention, and here, SLC NAND flash can provide a typical data retention of 10 years.

It is reported that serial port SPI NAND provides a perfect code and data storage solution for applications that used to use NOR Flash (SPI), which require high reliability and small packaging, but cannot accept the high cost of large-capacity NOR; while parallel port SLC NAND products are suitable for applications that require higher bandwidth.

However, the "disadvantage" of SLC NAND is also obvious - small capacity. "In terms of capacity, it is obvious that the world's largest SLC NAND capacity can reach up to 16Gb; while the starting capacity of 3D NAND can reach 512Gb." Industry insiders pointed out to Jiwei.com.

3D NAND is a solution to solve the capacity problem in three-dimensional space, which is stacked layer by layer in a way similar to building a building. However, the more layers are stacked, the greater the challenge of stability. Currently, major manufacturers such as Samsung and SK Hynix are investing huge amounts of money to solve this technical problem.

In summary, the two types of NAND have their own advantages. SLC NAND excels in product reliability, while 3D NAND has an advantage in capacity.

Under the new situation, where are the opportunities for SLC NAND to "turn around"?

The difference in product performance also directly determines the difference in their market applications. "SLC NAND is mainly used for communication equipment such as base stations, PON, routers, and monitoring and security fields. In recent years, low-power SPI NAND has also begun to enter the wearable device market represented by smart bracelets. 3D NAND focuses on large-capacity storage markets such as e.MMC for smartphones and tablets, UFS embedded products, solid-state drives (SSDs), and USB disks." Industry insiders pointed out, "Although SLC market share is not large, their market positioning is determined by performance differences, so it is impossible for 3D NAND and SLC NAND to replace each other."

In addition to its widespread adoption in the embedded market, SLC NAND has also recently entered the BOM of feature phones as 4G feature phones are selling well, continuing to play a role in storing data information. In addition, with the construction boom of 5G base stations around the world, SLC NAND has also appeared in 5G CPE products.

In addition, automotive electronics has become an important driving force for small and medium-capacity SLC NAND. With consumers' increasing demand for driving safety and comfort, as well as the promotion of relevant policies, automotive intelligence is ushering in a period of rapid development.

In automotive systems, from advanced driver assistance systems to fully autonomous driving, complex automotive applications will require higher-capacity flash memory, which makes cost considerations much more important for designers. NAND Flash has an advantage over NOR Flash in terms of unit cost, and can provide a good solution for larger-capacity automotive-grade flash memory, which will also be the "place" for SLC NAND. Gartner predicts that by 2024, global NAND Flash storage consumption in the ADAS field will reach 4.15 billion GB, with a compound growth rate of 79.8% from 2019 to 2024.

From the perspective of global NAND manufacturers, Samsung Electronics, Kioxia, Micron Technology and Hynix all occupied a large market share in the global NAND Flash market in 2019. Foreign manufacturers have established advantages by virtue of their first-mover advantage and in the terminal market.

However, currently, major overseas manufacturers are making every effort to expand 3D NAND production capacity, and the supply strategy of SLC NAND has changed. This has also created room for development for domestic SLC NAND manufacturers.

Industry insiders pointed out that "the leading advantage of overseas suppliers in NAND FLASH is mainly concentrated in 3D NAND, and the application market of 3D NAND is mainly storage in smartphones, solid-state drives, etc. Although overseas suppliers have first-mover advantages in SLC NAND products, these advantages are gradually disappearing as the SLC NAND market solidifies and domestic manufacturers invest in research and development."

SLC NAND is actually a very small market segment for suppliers such as Samsung and Micron, but for domestic manufacturers, the global market for SLC NAND is large enough, and SLC NAND is also the only way to enter MLC NAND, TLC NAND and even 3D NAND.

If SLC NAND occupies 5% of the global NAND FLASH market share, SLC NAND has a TAM of nearly 3 billion US dollars a year. Taiwan's memory suppliers such as Macronix and Winbond are also actively expanding the products and application areas of SLC NAND.