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Chinese semiconductor companies are becoming vertically integrated, extending their presence across the NAND Flash supply chain, from up- to downstream. Hence, they are expected to have a crucial role in the transformation of the industry in the next three to five years. China’s huge semiconductor market has also enticed NAND Flash suppliers from abroad to make increasingly large investments in building and upgrading fabs in the country. Samsung, for instance, is expanding its fab in Xian, while Intel will be converting its fab in Dalian from making logic ICs to making NAND Flash memory. Based on DRAMeXchange’s projection, approximately 8% of the total NAND Flash wafers from major international suppliers will be manufactured in China by the end of 2016, and the country’s share in global production will increase further at a rapid pace.
Average memory density of NAND Flash products in end devices will continue to rise; SSDs will lead the demand
Yang added that with various consumer electronics products seeing limited shipment growth, NAND Flash demand next year will be based on increasing the content per box. Moreover, decline NAND Flash prices will accelerate. In sum, DRAMeXchange estimates that the average density of both Client-SSD and smartphone eMMC products will increase at least 30% year on year in 2016.
SSD prices in general have fallen rapidly on account of the momentum in 3D-NAND Flash development and rising penetration of TLC technology. This downtrend benefits the Client-SSD market as PC-OEMs are now more willing to buy SSDs and design PC products that carry SSDs. DRAMeXchange projects that the penetration of SSD-equipped products in the notebook market for 2015 will reach about 27%. By the end of 2016, 128GB SSDs are forecast to cost less than 500GB HDDs and prices of 256GB will almost match those of 1TB HDDs. At that time, the SSD penetration in the notebook market is also expected to exceed 30%.
Also, the surging demand for data center services will also maintain strong growth in the Enterprise-SSD market. Total bit consumption of NAND Flash from all SSD products will jump by 35% year on year in 2016, based on DRAMeXchange’s estimation. Thus, SSDs will contribute the most to overall NAND Flash demand next year compared with other categories of end device products.
