Edited by Carol
Source: Compiled from the Internet
Reprint must indicate the source: Chip Master
Recently, the General Administration of Quality Supervision, Inspection and Quarantine and the National Standardization Administration approved20 national standards including the “Testing Methods for Semiconductor Integrated Circuit Voltage Regulators” and announced them.It is reported that these 20 standards will be implemented on August 1, 2018.
Among them, two standards proposed by Beijing Gigadevice Semiconductor Inc. (hereinafter referred to as “Gigadevice”) are also included.In September 2015, Gigadevice’s application for the “Serial NAND Flash Memory Interface Specification” and “Serial NOR Flash Memory Interface Specification” was approved by the Ministry of Industry and Information Technology. In January 2016, Gigadevice submitted the completed draft for public comment to the Standardization Research Institute of the Ministry of Electronics Industry.
In terms of NAND Flash, Gigadevice innovatively launched the world’s first high-performance, low-cost SPI interface NAND Flash at the end of 2012, and established its own corporate standards. Due to its low cost, easy integration, high performance, and good compatibility compared to traditional parallel NAND Flash, it has received a positive response in the market,with many system manufacturers such as domestic Huawei HiSilicon, ZTE, Spreadtrum, RDA, and global companies like Broadcom, Marvel, MTK, and Mstar quickly adopting it in large quantities.
In terms of NOR Flash, Gigadevice focuses on the development of Flash technology and products, continuously launching the most globally competitive products in its niche. It has now become one of the leading manufacturers in the SPI interface NOR Flash field, with a market share reaching first in China and third globally, with clients including Intel, Samsung, Toshiba, Huawei, Lenovo, and ZTE.
NOR Flash and NAND Flash, as the two major segments of storage (along with DRAM), have always attracted the attention of industry professionals.
Global Memory Development History
Memory is one of the three pillars of the semiconductor industry. In 2016, the global semiconductor market size was 340 billion USD, with memory accounting for 76.8 billion USD. For all electronic products around you, such as mobile phones, tablets, PCs, and laptops, memory is akin to steel in modern industry, a true “raw material” of the electronics industry. If we further subdivide memory, it can be categorized into DRAM, NAND Flash, and Nor Flash, with DRAM mainly used for PC memory (like DDR) and mobile phone memory (like LPDDR), each accounting for about 30%.
The DRAM sector has gone through decades of cyclical changes, with the number of players decreasing from 40-50 in the 1980s to five before the 2008 financial crisis: Samsung (Korea), SK Hynix (Korea), Qimonda (Germany), Micron (USA), and Elpida (Japan). These five companies basically controlled the global DRAM supply, and terminal product manufacturers like Kingston had almost no DRAM production capacity and had to purchase raw materials from them.
Samsung fully utilized the strong cyclical characteristics of the memory industry, relying on government support to expand production aggressively when prices fell, production was excessive, and other companies cut investments, further driving down product prices, thereby forcing competitors out of the market or even directly bankrupting them, a phenomenon referred to as the “counter-cyclical law.” In the memory field, Samsung has invoked the “counter-cyclical law” three times, with the first two occurrences in the mid-1980s and early 1990s, allowing Samsung to rise from nothing to the top position in memory. However, Samsung evidently felt that it wasn’t enough, and around the 2008 financial crisis, it raised the “counter-cyclical” sword for the third time.
At the beginning of 2007, Microsoft launched the memory-hungry Vista operating system, and DRAM manufacturers predicted a surge in memory demand, prompting them to increase production capacity. However, Vista sales fell short of expectations, leading to an oversupply of DRAM and a plunge in prices, compounded by the 2008 financial crisis, with DRAM chip prices collapsing from 2.25 USD to 0.31 USD. At this time, Samsung made a shocking move: it invested 118% of its total profit in DRAM expansion in 2007, deliberately exacerbating industry losses, adding the final straw to struggling competitors.
As a result, DRAM prices plummeted, falling below cash costs in mid-2008 and below material costs by the end of 2008. In early 2009, the third-ranked German manufacturer Qimonda couldn’t sustain itself and declared bankruptcy, causing European memory players to vanish. In early 2012, the fifth-ranked Elpida also declared bankruptcy, and Japan, which once held over 50% of the DRAM market, lost its last card.
By then, only three players remained in the DRAM field: Samsung, Hynix, and Micron.The mess left by Elpida’s bankruptcy was picked up by Micron, which had a new CEO in 2013, for over 2 billion USD. This price was deemed a fire-sale price, and five years later, Micron’s market value soared from under 10 billion USD to 46 billion USD, with 2 billion USD representing almost a day’s fluctuation in its market value.
In addition to DRAM, the other memory segment, NAND Flash, also faces similar situations. The players in the NAND Flash market include Samsung, Toshiba/SanDisk, Micron, and SK Hynix, with these four companies collectively holding 99% of the market share. Compared to the DRAM market, there is an additional player, Toshiba/SanDisk. NAND Flash is mainly used in two fields: one is mobile phone flash memory, and the other is solid-state drives (SSDs).
The Nor Flash market is quite special; although prices are also rising, the logic is somewhat different. In the feature phone era, mobile phones had low memory requirements, and NOR Flash was widely used due to the NOR+PSRAM XiP architecture. However, in the smartphone era, the emergence of memory-hungry apps exposed the shortcomings of NOR’s small capacity and high cost, leading to its gradual replacement by NAND, resulting in a shrinking market, with companies like Samsung, Micron, and Cypress gradually exiting the NOR market.
However, at the same time that major manufacturers were shutting down NOR production lines, NOR experienced a resurgence. The main reason is that AMOLED screens require a NOR Flash for electrical compensation, and the penetration rate of AMOLED displays is accelerating, especially after Apple adopted them, thus driving up the demand for NOR. The limited supply of NOR in the market has led to the rapid rise of another batch of manufacturers, such as Winbond and Nanya from Taiwan, as well as the rising star Gigadevice in the A-share market.
Current Status of China’s Memory Industry
In the past two years, the strong price trends in the memory industry have significantly affected the development of the domestic smartphone industry and the entire IC chip industry. Now, whether it is capital, the industrial chain, or end consumers, all are unusually sensitive and vigilant regarding news related to memory.
In terms of the memory industry, to become an influential manufacturer in the international market, cutting-edge technology, intellectual property rights, and large-scale production capacity are necessary conditions. Establishing these necessary conditions may take decades. Thus, it can be seen that the entry barriers to the memory industry are quite high, and currently, Chinese memory chip manufacturers do not pose a threat to major manufacturers like Micron, Samsung, and SK Hynix.
NAND Flash is one of the essential components in mobile terminal devices and also one of the most expensive components. For example, Apple’s newly launched iPhone X comes in two versions: 64G and 256G, with prices in China reaching 8,388 RMB and 9,688 RMB, respectively.
For a long time, Apple has mainly sourced NAND Flash chips for the iPhone from top memory chip manufacturers such as Japan’s Toshiba, Western Digital from the USA, and South Korea’s SK Hynix and Samsung Electronics. According to Sean Yang, an analyst at research firm CINNO, Apple is the world’s largest customer of NAND Flash chips, with total demand reaching 160 million units in 2017, accounting for 15% of global demand.
Recently, reports from the Nikkei Asian Review indicated that Apple is negotiating with Yangtze Memory Technologies Co., a subsidiary of Tsinghua Unigroup, for NAND Flash procurement. Yangtze Memory is seen as China’s hope to catch up and challenge market leaders such as Samsung Electronics, Toshiba, SK Hynix, Micron, and Intel in the storage field.
It is understood that Yangtze Memory was officially established on July 26, 2016, based on Wuhan Xinxin Integrated Circuit Manufacturing Co., with major shareholders including the China Integrated Circuit Industry Investment Fund and Tsinghua Unigroup, as well as the Hubei government. Currently, it is a subsidiary of Tsinghua Unigroup. The designed NAND Flash products are mainly based on 32 layers.
Yangtze Memory’s first NAND Flash production line is located in Wuhan, with an initial investment of 24 billion USD, covering an area of 1,968 acres, including three of the world’s largest single cleanroom 3D NAND Flash production plants. It is reported that the first production and power plant was topped out in September 2017. Currently, cleanroom renovations and installation of systems like air conditioning and fire protection are underway, with plans to move in equipment by April 2018 and aim for mass production in the third quarter.
In addition to Yangtze Memory’s 32-layer 3D NAND Flash, Fujian Jin Hua’s 32nm DRAM niche products and Hefei Changxin’s (Ruili) 19nm DRAM are also gaining momentum.
Fujian Jin Hua focuses on the development of niche memory, primarily targeting the consumer electronics market, and is expected to leverage China’s massive domestic demand market to grow its production capacity. Under subsidy policies, it is estimated that by the end of 2018, it may influence the sales strategies of international giants in the Chinese market and have the opportunity to acquire technology IP for international markets.
Hefei Changxin is targeting the core mobile memory products of international giants. Chinese smartphone shipments now account for over 40% of the global total, and if LPDDR4 can be successfully mass-produced and combined with subsidy policies, China’s government strategy to replace imports can achieve part of its phased tasks.
For domestic memory to truly turn the tables, it still faces many challenges, one being the technological gap, and the other being weak manufacturing standards. 2018 will be a key year for the development of China’s memory industry, and it is hoped that with strong policy support and the unremitting efforts of domestic manufacturers, China’s memory industry can truly lead the world in the near future.
The content of this article is compiled from Chip Master, Jiwei Network, and IT168
Editor: Yan Xiangning
