In 2024, the storage market is experiencing dynamic changes, with many positive developments, including rising contract prices, significant revenue growth for manufacturers, and multiple breakthroughs in technology. Amid this, major storage companies are gearing up for new challenges, especially as the NAND flash memory sector faces an impending shift.

How Far Have Major Companies Progressed with NAND Flash Technology?

This year, major storage manufacturers like Samsung, Micron, and SK Hynix have all made notable advancements in NAND flash technology.

In terms of NAND cell technology, Samsung has become the first in the industry to mass-produce its 9th generation V-NAND with QLC technology. On September 12, Samsung announced it had begun mass production of its 1Tb QLC (Quad-Level Cell) 9th generation vertical NAND (V-NAND), incorporating several groundbreaking technologies.

From a technological innovation perspective, Samsung’s 9th generation QLC V-NAND employs its unique channel hole etching technology to achieve the industry’s highest stack height with a dual-stack structure. Leveraging the expertise of TLC 9th generation V-NAND, the cell area and peripheral circuits are optimized, resulting in an 86% higher bit density than the previous generation.

Compared to earlier versions, the design of Samsung’s 9th generation QLC V-NAND improves data retention performance by about 20%, enhancing product reliability. Writing performance has doubled, and data input/output speeds have increased by 60%. Additionally, its low-power design reduces power consumption for both read and write operations by approximately 30% and 50%, respectively. This is achieved by sensing only the necessary bit lines (BL) to minimize power usage.

In terms of applications, Samsung plans to expand the use of the 9th generation QLC V-NAND from branded consumer products to mobile universal flash storage (UFS), PC, and server SSDs to meet the demands of customers, including cloud service providers.

Sung Hoi Hur, Executive Vice President and Head of Flash Product and Technology at Samsung Electronics, stated that as the enterprise SSD market grows rapidly and demand for AI applications increases, the company will continue to strengthen our leadership in the high-capacity, high-performance NAND flash market through 9th-generation QLC and TLC V-NAND.

However, at present, the mainstream products in the market are still TLC NAND flash memory particles. On August 6, SK Hynix’s Solidigm launched PCIe 5.0 data center SSDs, the D7-PS1010/1030 series, based on SK Hynix’s 176-layer 3D TLC NAND.

On September 11, SK Hynix announced the development of its high-performance SSD “PEB110 E1.S” for data centers, available in 2TB, 4TB, and 8TB versions. Currently undergoing validation with global data center customers, SK Hynix plans to begin mass production in the second quarter of next year.

On the other hand, Micron announced in late July that its SSD products featuring 9th generation (G9) TLC NAND technology had entered mass production, targeting personal devices, edge servers, enterprises, and cloud data centers. Micron’s G9 NAND achieves a data transfer rate 50% faster than current NAND technology used in SSDs. Its per-chip write and read bandwidths are 99% and 88% higher, respectively, than other NAND solutions. The Micron 2650 NVMe SSD, based on G9 NAND, achieves near-PCIe 4.0 performance levels, with a sequential read speed of up to 7,000 MB/s.

Micron also launched its new data center SSD, the 9550 NVMe SSD, featuring 232-layer 3D TLC NAND. It supports various AI workloads, offering a sequential read speed of 14.0 GB/s and a write speed of 10.0 GB/s—67% higher than competitive SSDs. The 9550 SSD’s random read speed reaches 3,300K IOPS, 35% higher than competitors, with random write speeds 33% higher.

The future of QLC SSDs is promising

Industry information indicates that NAND Flash, the core medium for data storage, is vital for SSD performance. Current SSDs use both TLC (Triple-Level Cell) and QLC flash.

In the AI era, there is a growing demand for storage, with SSDs playing a critical role. According to TrendForce, SSDs not only store model parameters during AI model training but also create checkpoints to save progress, making them crucial for high-speed data transfer and durability. As a result, customers primarily opt for 4TB/8TB TLC SSDs to meet the rigorous demands of AI training processes.

QLC SSDs, however, are gaining attention due to their higher storage density, which optimizes server space and reduces energy consumption. They can help large-scale data centers lower their total cost of ownership (TCO) while still meeting high-performance storage needs. Industry experts predict that as more data is generated in the form of videos and images, requiring larger storage capacities, TLC/QLC SSDs of 16TB or more will become the primary products for AI inference applications.

According to TrendForce, AI-related SSD procurement is expected to exceed 45 exabytes (EB) in 2024, with SSD demand in AI servers projected to grow by over 60% annually in the coming years. The share of AI SSDs within the NAND Flash market could rise from 5% in 2024 to 9% in 2025.

The Changing Landscape of the NAND Flash Market

On September 9, TrendForce’s latest research  indicates that in the second quarter of 2024, Samsung maintained its global leadership in the NAND Flash market with a 36.9% market share, up 0.2% from the previous quarter. SK Group followed with a 22.1% share, down 0.1%. Other key players include Kioxia (13.8%), Micron (11.8%), and Western Digital (10.5%).

In terms of revenue, Samsung, SK Group, Kioxia, Micron, and Western Digital all experienced quarter-on-quarter growth in NAND Flash revenues during the second quarter. Overall, NAND Flash revenue increased by 14% in the second quarter.

TrendForce indicates that as the inventory adjustments for server endpoints near completion and AI drives demand for high-capacity storage products, NAND Flash prices continued to rise in Q2 2024. However, due to high inventory levels at PC and smartphone manufacturers, NAND Flash bit shipments decreased by 1% quarter-over-quarter. Despite this, the average selling price increased by 15%, with total revenue reaching USD 16.796 billion, a 14.2% increase from the previous quarter.

Looking ahead to Q3, TrendForce expects that all NAND Flash suppliers have returned to profitability as of Q2 and plan to expand production capacity in Q3 to meet strong demand from AI and servers. However, due to weak market performance in the PC and smartphone sectors in the first half of the year, it is challenging to boost NAND Flash shipments. It is estimated that the average selling price of NAND Flash products will increase by 5% to 10% in Q3, while bit shipments may decrease by at least 5% due to a lack of peak season demand. Industry revenue is expected to remain roughly the same as the previous quarter.

(Photo credit: Samsung)

In recent years, the U.S., Japan and the Netherlands, have increasingly expanding restrictions on China in semiconductor technology. South Korea, on the other hand, has been cautiously responding to U.S. demands due to its significant dependence on the Chinese market.

Yet, according to a report by South Korean media outlet The Korea Herald, the U.S. is increasing pressure on South Korea to comply with its export controls to China.

At the Korea-U.S. Economic Security Conference 2024 held in Washington, D.C. on September 10th, U.S. Commerce Department Undersecretary Alan Estevez called on South Korea’s two leading HBM manufacturers, Samsung and SK hynix, to align with U.S. export controls on China. He urged that their production capacity be reserved for supplying advanced chips to allied nations, rather than competitors such as China.

Estevez emphasized his appreciation for South Korea’s long-standing cooperation with the U.S., but pointed out that since AI can be used for military purposes, it is crucial to prevent China from acquiring advanced chips to train AI models.

South Korea’s Trade Minister Cheong In-kyo responded that while they will discuss the matter with the U.S., export controls have a significant impact on South Korea’s businesses and economy.

Some industry sources cited by The Korea Herald have further pointed out that the direct export volume of chips from Samsung and SK hynix to China is not significant, so the actual impact may be limited.

However, per a previous Reuters report cited sources, it’s indicated that about 30% of Samsung’s HBM chip sales in the first half of this year were to China.

The Korea Institute for Industrial Economics and Trade noted that, unlike Japan and the Netherlands, South Korea cannot fully align with U.S. export control measures due to its significant reliance on exports to China.

Per the Chosun Daily citing data from South Korea’s Ministry of Trade, Industry, and Energy and the Korea International Trade Association, it’s shown that in July of this year, South Korea’s exports to China increased by 14.9% year-on-year to USD 11.4 billion, the highest since October 2022. Notably, memory exports surged 89% year-on-year to USD 6.8 billion.

Semiconductor exports saw particularly strong growth, with chip exports rising 49% year-on-year. In June this year, Korea’s memory exports also amounted to USD 8.8 billion, accounting for 65.8% of total semiconductor exports, which reportedly represents the highest proportion in two years since December 2021.

These figures reflect South Korea’s robust performance in the chip sector and the strong demand from the Chinese market for Korean semiconductors and other ICT products.

Meanwhile, due to the U.S.’s strict restrictions on chip manufacturing technology, China is striving for breakthroughs in the HBM field.

The HBM market is currently dominated by South Korea’s SK hynix, Samsung Electronics, and the U.S.’s Micron, all of which are producing the latest standard HBM3 chips.

However, a report from Tom’s Hardware, citing industry sources, has indicated that Chinese companies, including CXMT, have made progress in developing HBM and are in the early stages of production. Huawei is also collaborating with other Chinese companies, with plans to produce HBM2 chips by 2026.

Read more

• [News] ChangXin Memory Technologies in China Has Reportedly Begun Mass Production of HBM2
• [News] Progress Made in Chinese Consortium’s Development of HBM, Reportedly Targeting HBM2 Production by 2026

(Photo credit: Samsung)

According to a report from Reuters citing sources, Samsung Electronics, the global leading manufacturer of smartphones, TVs, and memory, is said to be cutting up to 30% of its overseas workforce in certain departments.

Per the same report, sources revealed that Samsung has instructed its global subsidiaries to reduce sales and marketing staff by around 15% and management personnel by as much as 30%. The plan, set to be implemented by the end of this year, will affect jobs across the Americas, Europe, Asia, and Africa.

Additionally, other industry sources reportedly confirmed Samsung’s global layoff plan as well. However, details about the extent of the layoffs remain confidential, making it unclear how many employees will be affected and which countries or business units will be hit the hardest.

Amid these rumored layoffs, Samsung is grappling with increasing pressure on its key departments. In May, the company replaced the head of its semiconductor division to tackle the ongoing chip crisis, as it strives to catch up with competitor SK hynix in supplying high-end memory used in AI chipsets.

In the premium smartphone market, Samsung faces fierce competition from Apple and China’s Huawei, while it has also lagged behind TSMC in chip manufacturing.

A source pointed out that the layoffs are aimed at addressing the slowdown in global tech product demand due to the global economic downturn. Another source, however, mentioned that Samsung is looking to boost profits by cutting costs.

Per Reuters, Samsung has noted in a statement, claiming that some workforce adjustments in its overseas operations are routine measures aimed at improving efficiency. The company stated that these plans do not have specific targets and added that production staff would not be affected.

According to Samsung’s 2024 sustainability report, as of the end of 2023, the company employed 267,860 people, with over half (147,104 employees) located overseas. The report indicated that the majority of jobs were in manufacturing and development, with 25,136 employees in sales and marketing, and 27,887 in other areas.

Other sources cited by Reuters revealed that the global directive for layoffs was issued about three weeks ago. Samsung’s India operations have already offered severance packages to some mid-level employees who have left in recent weeks, with the total number of employees expected to leave the Indian subsidiary potentially reaching 1,000.

Samsung employs around 25,000 people in India, where the company generates an annual revenue of approximately USD 12 billion. Wage strikes are currently disrupting production in the country.

Read more

• [News] Samsung Partners with TSMC, Its Foundry Rival, on HBM4 Development
• [News] Samsung Signals Will to Collaborate with Other Foundries on Basedie

(Photo credit: Samsung)

After its 8-Hi HBM3e entered mass production in February, Micron officially introduced the 12-Hi HBM3e memory stacks on Monday, which features a 36 GB capacity, according to a report by Tom’s Hardware. The new products are designed for cutting-edge processors used in AI and high-performance computing (HPC) workloads, including NVIDIA’s H200 and B100/B200 GPUs.

It is worth noting that the achievement has made the US memory chip giant almost on the same page with the current HBM leader, SK hynix. Citing Justin Kim, president and head of the company’s AI Infra division at SEMICON Taiwan last week, another report by Reuters notes that SK hynix is set to begin mass production of its 12-Hi HBM3e chips by the end of this month.

Samsung, on the other hand, is said to have completed NVIDIA’s quality test for the shipment of 8-Hi HBM3e memory, while the company is still working on the verification of its 12-Hi HBM3e.

Micron’s 12-Hi HBM3e memory stacks, according to Tom’s Hardware, feature a 36GB capacity, a 50% increase over the previous 8-Hi models, which had 24GB. This expanded capacity enables data centers to handle larger AI models, such as Meta AI’s Llama 2, with up to 70 billion parameters on a single processor. In addition, this capability reduces the need for frequent CPU offloading and minimizes communication delays between GPUs, resulting in faster data processing.

According to Tom’s Hardware, in terms of performance, Micron’s 12-Hi HBM3e stacks deliver over 1.2 TB/s. Despite offering 50% more memory capacity than competing products, Micron’s HBM3e consumes less power than the 8-Hi HBM3e stacks.

Regarding the future roadmap of HBM, Micron is said to be working on its next-generation memory solutions, including HBM4 and HBM4e. These upcoming memory technologies are set to further enhance performance, solidifying Micron’s position as a leader in addressing the increasing demand for advanced memory in AI processors, such as NVIDIA’s GPUs built on the Blackwell and Rubin architectures, the report states.

Read more

• [News] SK hynix to Begin 12-Stack HBM3e Mass Production, Marking Key Moment in HBM Battlefield
• [News] Samsung Likely Emerges as the Pacemaker for the AI Market if It Secures HBM3e Supply to NVIDIA

(Photo credit: Micron)

According to a report from Korean media ZDNet Korea, Chinese memory manufacturers like CXMT (Changxin Memory Technologies) are aggressively expanding production, which could negatively affect profitability in the traditional DRAM market. Both Samsung and SK hynix are said to be closely monitoring these developments.

Established in 2016, CXMT has become China’s largest DRAM producer with government backing, focusing on traditional DRAM and preparing to enter the HBM market.

Reportedly, CXMT has rapidly increased its DRAM production capacity, from 70,000 wafers per month in 2022 to 120,000 in 2023, and is projected to reach 200,000 wafers this year.

CXMT’s main products include 17nm and 18nm DDR4 and LPDDR4, with its latest offerings being 12nm DDR5 and LPDDR5X, which the company is also developing. Its aggressive DRAM expansion could negatively impact sales and profits for Korean memory manufacturers.

According to TrendForce’s data, the spot price of 16Gb DDR4 increased from $3 in the second half of 2023 to $3.50 in the first half of this year, before falling back to $3.30 in the second half of 2024.

For DDR5, prices have increased from $4.20 in October 2023 to over $4.50 in the first half of this year, approaching $5 in the second half.

By the end of August, the price premium of DDR5 over DDR4 had surged to 53.9%, up significantly from 36.9% six months earlier.

Per a recent report from Nomura Securities cited by ZDNet Korea, the rapid expansion of Chinese companies is expected to negatively impact the memory industry’s profitability, necessitating preparations for potential disruptions. CXMT’s production now accounts for about 5% of the market, potentially influencing prices.

Read more

• [News] Samsung and SK hynix’s China Revenue Doubled in 1H24, Reportedly Driven by Semiconductor and HBM Demand
• [News] China-US Chip War Escalated as YMTC Sues Micron for Patent Infringement

(Photo credit: CXMT)