Many of us have been around this NAND/SSD game long enough to have seen several up and down cycles. However, this last one was the perfect storm: unprecedented levels of both demand softening and price declines. In March 2024, ClearView Memory Research reported that the top 5 NAND suppliers lost $28 billion in operating profit from 4CQ22 to 1CQ24.
The good news is that demand and pricing are returning to “normal” levels. Reported by Forward Insights in May 20241, the bit growth demand is expected to more than double in just the next 4 years, driven largely by SSD applications.
Further driving the need for high performance and high-capacity SSDs are fast-growing Artificial Intelligence (AI) applications. AI is the buzz term of 2024, and its impact on enterprise and data center server and storage bit growth demand is significant. In fact, as reported by IDC, SSD capacity linked to AI is expected to increase by 55% CAGR in the time period of 2023-20282. The NAND industry is faced with the challenge of keeping pace with this massive bit growth while maintaining fiscal health and adopting sustainable practices.
Producing next-generation planar NAND used to be fairly straightforward. Investments to design and produce the next-generation of NAND every ~18 months paid worthwhile dividends in the form of reasonable cost reductions. There was time for a NAND company to recoup its investment in the previous generation before moving to the next. The race to keep pace with bit growth has seen significant incremental CAPEX investment at a furious pace, with NAND companies moving on to the next-generation without recovering the investment. When the market turns with lower demand coupled with record price declines, the industry can experience record losses.
Investing in and developing the right technologies can be key to overcoming these challenges and seizing the opportunities they present. KIOXIA recently introduced an entirely new architecture with our latest BiCS FLASHTM 3D flash memory called CBA (CMOS Bonded to Array). CBA’s primary advantage, compared to other 3D NAND architectures such as CNA (CMOS Next to Array) and CUA (CMOS Under Array), is independent manufacturing and optimization of the cell array wafer and the CMOS wafer (aka peripheral circuit). The manufacturing and optimization independently of each wafer eliminates the trade-offs between cell reliability and I/O speed, allowing KIOXIA the flexibility to optimize around a number of key metrics based on the end application: power, performance, density, or cost-effectiveness.
Rather than just moving from one generation to the next, we are now seeing multiple NAND generations co-existing for the foreseeable future to address SSD application requirements for different markets. A few examples include lower density NAND for boot and entry level markets, high NAND interface speeds for hardware-to-application optimization, and high-density NAND for AI and HDD displacement. KIOXIA plans to support multiple optimized 3D generations simultaneously to improve total production costs while ensuring supply stability.
Bit growth is skyrocketing. With CBA technology, KIOXIA is in position to meet forecasted bit growth by working toward maximizing utilization of each NAND generation while simultaneously attempting to efficiently address NAND generational changes through smarter CAPEX spending.
Ready to read more about what the future of flash memory development looks like? Be sure to check out this recent Q&A on the topic.
1Forward Insights May 2024, “NAND Quarterly Insights Q2/24 – NAND Applications” graph used with permission.
2IDC source: Outlook for AI Semiconductors and Storage Components in IT Infrastructure (IDC #US51851524, Feb 2024). Used with permission.
Disclaimer
The views and opinions expressed in this blog are those of the author(s) and do not necessarily reflect those of KIOXIA America, Inc.