* Posts by NAND_guy

7 posts • joined 5 Aug 2014

Cheap NAND nasty: Flooding market with chips threatens prices

NAND_guy

What about demand?! It is about to burst out!

You are only looking at supply. Demand is about to undergo a huge shift. AI in its many flavors, AR, VR, and, perhaps especially for NAND, autonomous vehicles ("servers on wheels") will be demanding huge amounts of NAND and DRAM. Timing of course is critical: will autonomous vehicles be ready for prime time by 2020 or 2021? Some certainly say yes, especially taxi and delivery type vehicles. If so, they will soak up a enormous supply and that supply needs to be there if autonomous vehicles are to be built in volume. So, it becomes a chicken-and-egg issue. The storage and memory vendors don't want to wait until everything else is finished. Everyone is moving ahead on all fronts. Worst case scenario is that the memory and storage vendors leave some clean room space vacant for a few months to a couple of years while other problems are resolved.

The vendors have, for the most part, said that they will decide how to use the clean room space that they are building after it is built. Intel is the exception to this; Dalian will be used for their 3D NAND. WDC just said in their CC that they will talk to Toshiba about what to do with the fab they are building. And both Hynix and Samsung have said similar things in recent weeks about their new capacity. Micron is expanding clean room space, but they are not adding many new wafers. People who comment on expanded clean room space appear to ignore the fact that it takes more physical space and equipment to produce the same number of wafers of NAND and DRAM at current geometries. And the truth is: none of the established vendors wants to create a bust. They have been there, done that, it is counterproductive. They have become adept in recent years at bringing up their fabs slowly, so that they don't overwhelm the market. And of course they do want to increase the proportion of SSDs in PCs and laptops as well as servers over the next few years. The price is gradually becoming compelling. I know my own desktop 7200 HD is becoming increasingly annoying when compared to my speedy laptop SSD. For a hundred bucks and a few hours, I can remedy that.

If there were still a dozen or more NAND and DRAM vendors, then perhaps you (Chris) would have a better point. But there aren't. And while there are some new entrants from China, IMHO people are making an error if they believe that those new fabs will be producing large amounts of either 3D NAND or DRAM soon. The vendors with decades of experience behind them are having production difficulties at the current tiny nanometer sizes.

That's my two cents for now.

Half of all Windows 10 users thought: BSOD it, let's get the latest build

NAND_guy

I didn't get the BSOD and my desktop computer is fine, but it screwed up my laptop. Can't get sound, the start button won't work and if I have to connect using WiFi or Airplane Mode, I am out of luck. Although if I already connected to the host in the past (as with my neighborhood Panera as well as my home network), WiFi works.

Weird. I hope the upcoming patch fixes it. If not, I will have to revert to the previous edition. Unless someone here has a possible solution to try.

China may stick to its own DRAM memory soon – researchers

NAND_guy

First of all, it is no longer easy to produce state of the art DRAM.

Second, the memory chip vendors and, indeed, most semiconductor vendors, have existed in highly competitive markets for decades. They know how to cut costs to the bone. It is only in the last few years that two of the three memory chip vendors have made good money, Micron and Hynix. Samsung has made good money for much longer, but even they are now making record amounts, because the three of them control well over 90% of the market currently.

Will the Chinese have an easy time breaking into that market? The Big Three have the experience of the steel and solar sectors to reflect on and I am sure that they are already preparing to deal with the Chinese. Penny Pritzker warned Congress about Chinese infringements and ambitions last year and I know Japan has also been alert as they face the Toshiba situation. The Taiwan govt has filed several suits against former employees of semiconductor firms for theft of trade secrets. We know about these cases; we of course don't know about employees who may have been successful.

That said, my guess is that everyone who has valuable patents and processes is ready to file against the Chinese at the first sign of infringement. Of course, on the other hand, most of the large semiconductor have important plants in China and so are open to being pressured in one way or another.

At the end of the day, we may have to depend on two things to protect against the threat that China represents to the semiconductor sector: 1) China's ambition to be not only the wealthiest country in the world but also a true leader as opposed to rogue country that depends on theft for its success. That is a thin reed, to be sure, but related to that, we have 1a) International institutions that will pressure China in various ways to punish them if they do resort to theft to build their semiconductor sector.

And second, we must depend on the ingenuity of current semiconductor firms to continue to innovate and render the Chinese theft less useful, as they will in theory at least not be able to steal the latest chips that the companies invent. We know that the semiconductor sector has been incredibly inventive over the years competing against each other and against themselves ("Only the paranoid survive") and trust that this ingenuity will continue. Both the hard drive and the semiconductor firms have continually come up with new methods and products that have improved speed, reliability, capacity and productivity over the years. I don't think that any sector has ever matched their engineering genius and I doubt if the Chinese will find it easy to do so either. Certainly not for a number of years.

Toshiba draws back from fab foundry lock-out foolishness

NAND_guy

However true it is that "Taiwanese != Chinese", Foxconn has strong Chinese ties and contacts.

SanDisk flash array launch signals imminent AFA battle

NAND_guy

Shouldn't NexGen be on your list as well?

Now we see why Sandisk spun them off--no room at the inn for both them and InfiniFlash.

Flash could be CHEAPER than SAS DISK? Come off it, NetApp

NAND_guy

a new fab for a billion dollars?!

Wow, I'm sure all of the flash folks would love to be able build a new fab for a billion dollars. But the cost for a large enough fab to make economic sense is more like $5-6b. At a minimum. Samsung estimated that the investment in their new fab in Xi'an will be $7b. That will probably prove to be low. 3D production has more steps, is more complicated and costs more than planar NAND to build.

What that last paragraph ignores, IMO, is that today there will only be 4 companies (at the most--Samsung, Toshiba/Sandisk, Micron, Hynix) building a new fab, not a dozen or more as in the Bad Old Past and those companies have learned how to bring the capacity up in stages rather than all at once. And the beauty of the SSD market for the flash companies is that they can get rid of extra flash by making larger capacity drives for not very much more money and still make good profits. At least, they can if they don't really drastically misjudge the market. There is no incentive for a company to overbuild and over-supply the market with only a few relatively strong competitors as there was when the market was more fragmented and had many weak competitors that could be picked off by lowering prices.

I know what this sounds like, but -- "This Time Really Is Different". Really. At least for the NAND vendors that have successful SSD programs. At least until SSDs saturate the market. And, as Rakers and Mellor point out, we are a long way off from that--it will take many years and many billions of dollars of investment before that can happen (sigh of relief here from Seagate and WD). As the only pure play in NAND, Sandisk in particular ought to do well in the coming years, especially given the way they have been building up their SSD business (disclosure: yeah, I own the stock; but no, I am not employed by them or by any company with any interest in them). If Micron and Hynix can get their NAND acts together, they should also do well, although Hynix in particular has legal problems ahead of it and currently badly lag.

Is SanDisk about to become the big daddy of enterprise flash?

NAND_guy

a few thoughts

Well, your article provoked a few thoughts from me.

First of all, Micron is producing NAND at 16nm right now and they are using it in some of their SSDs, in particular their most recent consumer drive, the MX100, which has gotten very good reviews and is a cost leader among consumer SSDs. 16nm chips still constitute less than half of their production, but that is better than Sandisk's 15nm, which isn't yet in production. Crossover should happen later this year.

Second, Micron definitely has ambitions to be in enterprise drives. But yes, they have a difficult road to travel with Intel, Samsung and Sandisk already well established there. However, based on what they have said in their CCs, they are pretty determined to eventually be a player--I suspect after they begin producing 3D chips at the end of 2015 or in 2016. Hard to see how they will do it before then.

Samsung has produced the first 3D enterprise drive, although I am not sure who is actually using it yet--we should find out more this week at the Flash Memory Summit. Toshiba--along with Sandisk--should be producing 3D drives in 2016, but, as with Micron, I am not sure where Toshiba will be before then. However, it is clear that Samsung wants to be a bigger player in enterprise, which is why they entered 3D production before anyone else. Whether that will turn out to be the right strategy or not, only time will tell.

Hynix probably has the most difficult road to travel, as apparently the only way they got to be competitive in NAND was by stealing trade secrets from Toshiba/Sandisk, which they are currently being sued for by both companies and an ex-employee has been charged in Japan with theft. It will cost them a lot of money, time and management distraction at the very least, and Sandisk is also asking for an injunction against their chips. A very messy situation.

Sandisk and WD made a deal to produce hybrid drives last year ( http://www.anandtech.com/show/6943/wd-and-sandisk-collaboration ) but I haven't heard of anything actually coming of it.

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