According to industry sources cited in a report from Business Korea, Japanese NAND Flash supplier Kioxia is preparing to restart its merger plan with its partner Western Digital (WD). However, SK Hynix, a major shareholder and Korean memory giant, continues to firmly oppose the merger.

The same report citing industry sources also indicates that Kioxia could potentially go public on the Tokyo Stock Exchange as early as October 2024, according to its schedule. Kioxia’s major shareholder, Bain Capital, a U.S. private equity firm, has engaged its creditor banks to review the listing process, with the banks providing over JPY 1 trillion in loans to support this effort.

Despite facing losses of JPY 254 billion from the second to fourth quarters of 2023 and the impending repayment of a JPY 900 billion loan in June 2024, Kioxia has seen improved market conditions in the memory market, leading to higher market quotations and increased revenue to address these financial challenges. This resurgence has prompted Kioxia to restart its merger plans with WD, with the backing of creditor banks supporting this initiative.

However, SK Hynix, which indirectly holds a 15% stake in Kioxia through a KRW 4 trillion investment in Bain Capital, has explicitly stated its opposition to restarting the merger between Kioxia and Western Digital. A representative from SK Hynix cited by the report from Business Korea stated that their position against the merger of Kioxia and WD remains unchanged. However, they are open to discussing potential cooperation under conditions that protect their investment interests.

In 2023, Kioxia and Western Digital had drafted a merger agreement that was blocked due to opposition from SK Hynix. The same report, citing industry sources, suggests that SK Hynix is expected to continue opposing the merger of the two companies. SK Hynix intends to leverage its advantages in the normalization of the NAND Flash market to maximize the gap in market conditions between itself and Kioxia/ WD as much as possible.

For the NAND Flash market, TrendForce’s report in march has indicated that, as of the fourth quarter of 2023, SK Group captures the global market with a share of 21.6%, followed by WD (14.5%) and Kioxia (12.6%).

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• [News] SK Hynix Rumored to Propose Collaboration with Kioxia for HBM Production in Japan
• NAND Flash Industry Revenue Grows 24.5% in Q4 2023, Expected to Increase Another 20% in Q1, Says TrendForce

(Photo credit: Western Digital)

According to a report from Korean media ETNews citing industry sources, it has indicated that Samsung Electronics has recently increased the capacity utilization rate of NAND Flash to over 90%, a further increase from the first quarter’s 80%.

Previously, Korean media including ETNews and The Elec held a relatively optimistic view of Samsung Electronics’ NAND Flash business, reporting that the operating rate of the Xi’an plant had reached 70%. However, the Chosun Daily has a different perspective, suggesting that Samsung Electronics continues to maintain its plan of reducing production by 50%.

According to the same report from ETNews, some NAND Flash fabs of Samsung are currently operating at full capacity, significantly better than the lowest utilization rate of 60% seen in 2023. Reportedly, the capacity utilization rate of the Xi’an plant in China has notably increased, followed by a gradual recovery in the NAND Flash capacity at Samsung’s Pyeongtaek facility in South Korea.

The report further cited another industry source who noted that downstream customers’ inventories of NAND Flash have essentially been depleted, leading to a balanced supply-demand trend. This is reportedly a key driver behind Samsung’s ongoing increase in capacity utilization.

The primary reason for the rise in NAND Flash market demand is attributed to the AI trend driving increased demand for enterprise solid-state drives (SSDs) from related businesses. This includes cloud computing service providers in North America and China increasing their purchases of enterprise storage to meet market demands.

As per TrendForce’s press release in March, it has projected a strong 13–18% increase in Q2 NAND Flash contract prices, with enterprise SSDs expected to rise highest. Despite Kioxia and WDC boosting their production capacity utilization rates from Q1 this year, other suppliers have kept their production strategies conservative. The slight dip in Q2 NAND Flash purchasing—compared to Q1—does not detract from the overall market’s momentum, which continues to be influenced by decreasing supplier inventories and the impact of production cuts.

Read more

• [News] Korean NAND Flash Manufacturers Cautiously Increase Wafer Input, Capacity Utilization Maintains Around 50%
• [News] Western Digital Customer Letter Confirms HDD Supply Shortage! NAND Flash and Hard Drive Prices Continue to Rise

(Photo credit: Samsung)

TrendForce releases the latest trends in memory spot prices. Due to sellers halting quotations, DDR3, DDR4, and DDR5 have all seen price increases. It is expected that prices will decline once quotations are fully resumed. On the other hand, with no strong signs of recovery in end-market demand for NAND Flash, inquiry interest remains subdued. Details below:

DRAM Spot Market:

In the spot market, sellers and module houses suspended quoting following Taiwan’s earthquake on April 3, leading to incremental price rises over several days. This upward trend applies to DDR3, DDR4, and DDR5 products. However, the spot market still lacks demand, and transactions have been limited in terms of quantity. TrendForce believes sellers will resume quoting very soon, and prices will shift down again as before. The average spot price of mainstream chips (i.e., DDR4 1Gx8 2666MT/s) rose by 0.93% from US$1.927 last week to US$1.945 this week.

NAND Flash Spot Market:

Suppliers are carrying on with their increase of contract prices for the mainstream 512Gb wafers by more than US$4, though inquiries have been sluggish as distributors are currently holding onto an excessive level of low-cost inventory, and that end market demand has also yet to resuscitate. TrendForce noticed that a number of suppliers are truncating with prices that are slightly below that of contract prices for March, which are generating some sort of pricing pressure. Spot prices of 512Gb TLC wafers have risen by 0.03% this week, arriving at US$3.765.

According to a report from South Korean media The Chosun Daily, Samsung Electronics is set to increase wafer input by approximately 30% this quarter at its NAND Flash production lines in Pyeongtaek, South Korea, and Xi’an, China. However, Samsung remains cautious about further production increases to avoid impacting NAND Flash price trends.

The report indicates that while Samsung’s NAND Flash production lines can exceed 2 million wafers in a quarter at full capacity, internal targets for wafer output in the second to fourth quarters are capped at 1.2 million wafers each, maintaining overall utilization rate at around 50%.

Market expectations cited in the same report suggest that Samsung Electronics will reaffirm its stance on reducing NAND Flash production during the first quarter earnings call later this month. In the previous earnings call, Samsung noted persistent high levels of NAND Flash inventory among major customers, necessitating continued aggressive production cuts.

The same report further indicates that SK hynix has set a quarterly cap of around 600,000 wafers for NAND Flash production, with overall utilization rate ranging between 50% and 60%.

As per TrendForce’s data, it has projected a strong 13–18% increase in Q2 NAND Flash contract prices, with enterprise SSDs expected to rise highest. Despite Kioxia and WDC boosting their production capacity utilization rates from Q1 this year, other suppliers have kept their production strategies conservative. The slight dip in Q2 NAND Flash purchasing—compared to Q1—does not detract from the overall market’s momentum, which continues to be influenced by decreasing supplier inventories and the impact of production cuts.

Read more

• [News] Memory Manufacturers’ Price Hikes Prompt Backlash, Module Suppliers Hesitate to Follow
• [News] Micron Expects 4-6% Quarterly DRAM Supply Impact Post Taiwan Earthquake

(Photo credit: Samsung)

AI and big data are driving a massive demand for memory data, which also imposes higher requirements on memory technologies. Against this backdrop, the technology competition among memory giants is heating up.

In terms of NAND Flash, major companies are focusing on breakthroughs in the number of layers. Recently, The Korean Economic Daily reported that Samsung Electronics is expected to mass-produce the ninth-generation NAND Flash (V-NAND) later this month.

The company had already produced the 236-layer eighth-generation V-NAND Flash memory at scale in 2022. The upcoming ninth-generation V-NAND Flash memory will continue to use the structure of double NAND Flash stacks, with the number of layers reaching 290. According to industry predictions, Samsung’s future tenth-generation V-NAND is expected to reach 430 layers, and Samsung will switch to a three-stack structure at that time.

Looking further into the future, both Samsung and Kioxia have revealed plans to develop 1000-layer NAND Flash. Samsung aims to develop 1000-layer NAND Flash by 2030, while Kioxia plans to mass-produce 3D NAND Flash chips with more than 1000 layers by 2031.

In terms of DRAM, memory giants are zeroing in on advanced process nodes and 3D DRAM.

In March 2024, Micron disclosed in its financial result that the majority of DRAM chips are currently at the 1α and 1β advanced nodes, and the next generation 1γ DRAM will introduce EUV lithography machine, which has already undergone trial production.

Samsung’s DRAM chip technique is at the 1b nm level, and recent reports suggest that Samsung plans to start large-scale production of 1c nm DRAM within this year, using EUV technology. Samsung will also step into the era of 3D DRAM in 2025. The company has already demonstrated two 3D DRAM technologies: vertical channel transistors and stacked DRAM.

SK Hynix is also developing 3D DRAM. Last year, BusinessKorea reported that SK Hynix proposed using IGZO as the new generation channel material for 3D DRAM. According to industry sources, IGZO is a metal oxide material composed of indium, gallium, and zinc oxide. Its biggest advantage is its low standby power consumption, making it suitable for DRAM transistors requiring long lifespan. This characteristic is easily achievable by adjusting the composition ratio of In, Ga, and ZnO.

(Photo credit: Samsung)