New Competition among companies of S. Korea and Japan in NAND flash memory

In areas of DRAM for PCs and DRAM for mobile DRAM, so far, Samsung Electronics and SK Hynix retained their dominant leadership by a wide margin in the global markets. But for NAND flash memory, the two giants’ paths are difficult to predict.

NAND flash is mainly used in smartphones, MP3 players, and digital cameras and can be available even when the power is turned off. In a recent, the global NAND flash memory makers started mass-production of it in anticipation of 30~40% growth in demand caused by rapid market growth of SSD. As a most noticeable movement, Toshiba, with market share of 32.3%, takes the No. 2 position following Samsung Electronics (37.5%), widening the gap of global market share against Micron (16.6%) and SK Hynix (13.6%).

According to industry sources, Toshiba could have seized an opportunity to chase after Samsung Electronics as the availability of NAND flash memory, which so far only applied at smartphones, MP3 players, expanded into larger storage space, the so-called “Solid State Drive (SSD) for private and corporation. The strategic partnership with Sandisk, a global leading maker of SSD with market share of 13%) boosts its path in the global market.

According to U.S.-based market researcher iSuppli, it is expected that the SSD market could double from US$7.018bil. in 2012 to US$15.96 bil. in 2015. Samsung Electronics started mass-production of 3D V NAND flash memory in the Chinese market in May in a hurry to preemptively meet the growing demand. Samsung Electronics leads the market by widening the technology gap against competitors along with the initiative in the mass-production of 3D V NAND flash memory.

With its No. 1 market share of SSD, NAND flash memory, and mass-production capability, Samsung Electronics enjoys an overwhelming advantage over its competitors. However, suitable profits are not being created despite its overwhelming technology advantage and market share. So the leading maker’s agony is increasingly deepened.

The price of NAND flash memory chip was 7.6% down in the first-quarter of this year compared to the previous quarter, making projections that by the end of this year, the price would drop to even under $1, caused by massive over-supply by each competitor in the second-quarter.

SK Hynix rechanged the M12 line in Cheongju into NAND flash memory line due to a fire accident of its Chinese factory, the initially planned line for the product. The U.S. Micron is scheduled to change the role of its Singapore-based factory to produce NAND flash memory chip.

SK Hynix aims to complete the development of 3D NAND product by June and is set to start the massproduction of it at the end of this year at the earliest.

 
 
 
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