September 18, 2011

NAND as we know it is reaching the end of the line. It’s been a good run.

But Judgement Day is Coming!

2014 looks like the year. Not so far off.

3D NAND looks like the technology ready to pick up where 2D NAND leaves off.

Post-NAND technologies like 3D resistive RAM, Ferroelectric RAM, MRAM, and Phase Change Memory (PCM) are not ready for prime time. This appears to leave the market with 3D NAND.

The thinking is that 3D NAND will be a replacement technology spanning between 2D planar NAND and whichever post-NAND technology emerges down the road. 3D NAND’s reign looks to be relatively short- lasting five to eight years.

3D NAND is true vertical NAND cell stacking not to be confused with chip stacking in a multi-chip package. In 3D NAND, NAND layers, not chips, are stacked in a single chip.

In many respects, 3D NAND is evolutionary, not revolutionary. The good news is continued cost reduction, smaller die sizes and more capacity. Also, installed NAND toolsets in the wafers fabs can, for the most part, be reused, thereby extending the useful life of fab equipment.

The bad news is that this 3D technology is still basically NAND with all its inherent limitations of data reliability and performance.

The wrinkle is that each of today’s NAND players has a different approach to 3D NAND.

Toshiba/SanDisk and Samsung are each developing variants of charge-trapped flash technology. Toshiba calls its 3D NAND: Pipe-shaped Bit-Cost Scalable or P-BICS.


Samsung dubs its 3D NAND: Terabit Cell Array Transistor or TCAT.


Hynix is pursuing a vertical floating-gate structure.

Micron hopes to transfer its DRAM expertise in deep trenches to 3D NAND.

In addition, Macronix is developing yet another 3D NAND charge-trapping technology based on its BE-SONOS technology.

This fragmentation is going to create winners, losers and chaos.


Its going to take deep pockets to hit the ground running. Samsung and Toshiba/SanDisk  have the resources, as well as the expertise and mind-share with equipment suppliers to make a go of it.

They’ve also both had R&D engineering teams hammering away at the problem for a while now. Toshiba since 2007. Samsung apparently since soon thereafter.

Both TCAT and P-BICS are similar charge-trapped flash technologies with similar structures. Samsung and Toshiba have been engaging in a war of words since at least 2009 on which approach is superior.

SanDisk is late to the 3D NAND party, but looks positioned to ride Toshiba’s P-BICS coattails.

In April of this year in the Q1 SanDisk conference call, Sanjay announced that SanDisk would be joining forces forces with Toshiba to co-develop P-BICS.

Sanjay’s comments:

“In the first quarter, we made an incremental strategic technology investment with Toshiba that covers a variety of technologies including a three-dimensional NAND architecture, known as Bit Cost Scalable or BiCS, which Toshiba had been developing independently. We believe that SanDisk and Toshiba joining forces to co-develop BiCS will allow us to further build on our past decade of successful development of multiple generations of NAND flash technologies.

BiCS, if successfully developed and commercialized, can leverage the installed NAND toolsets in the wafers fabs very well, thereby extending the useful life of fab equipment. We expect BiCS to enable further memory cost reductions beyond the future 1Y or subsequent scaled NAND, until 3D Read/Write memory, which remains our ultimate goal, is fully ramped into high volume production.”

SanDisk’s incremental strategic technology investment with Toshiba in Q1 2011 was $115 million.

My guess is that SanDisk held off this long before backing 3D NAND because it believed that its 3D Read/Write memory based on scalable crosspoint diode arrays would be ready.

EUV technology appears to be critical for this post-NAND technology, and EUV is late.

Tick Tock.


Time will tell whether Macronix, Hynix, and Micron have what it takes for 3D NAND, but its going to be tough, especially if Samsung and Toshiba/SanDisk don’t stumble.

Today Samsung and Toshiba/SanDisk together account for about 75% of NAND production (by bits). Hynix and Micron/Intel together produce the remaining 25%.

Macronix isn’t even on the charts.

Samsung and Toshiba/SanDisk enjoy the economies of scale and R&D budgets that go with their market share.

If there’s a canary in this mine, that would be Micron’s NAND partner Intel.

While Micron has recently been talking up 3D NAND, there’s been nary a peep (that I’m aware of) from Intel.

This would be consistent with Intel’s retreat from the NAND business itself. Intel hasn’t contributed a dime towards the ramping joint Micron/Intel IMFS Singapore NAND fab in the last year or so. Micron on the other hand has had to pony up $1.565 billion.

This joint venture started off essentially 50/50. Today Micron’s ownership percentage is up to 86% (info from SEC filings).

A couple of years ago, Eli Harari summarized the challenges that the Micron/Intel (2D) NAND JVs faced- “It is tough to be number 4 in a rough neighborhood.”

It’s not going to get any easier with the arrival of 3D NAND and post-NAND technologies.

My guess is that Intel saw the writing on the wall, looked carefully at it’s options and contractual obligations, and has decided to tread water until a clean exit can be executed.

Clearly the world isn’t going to end as 2D NAND runs out of steam. The existing fabs even without 3D NAND are going to keep on chugging along throwing off a long tail of cash for years.

That said, the uncertainty of what’s coming next is going to loom. The whole NAND ecosystem is going to increasingly feel this pressure. Smaller players are particularly vulnerable. Especially, in an uncertain economy.

The Wall Street Journal noted last week that: “More than half of the U.S.-based companies making their domestic stock-market debuts this year are trading below their offer price, an ominous backdrop for any companies hoping to come public.”

Multi-billion dollar emerging markets are there for the taking. The technological roadmap is uncertain.  Sounds like a recipe for chaos.

With chaos comes opportunity- especially for those like SanDisk positioned to emerge as winners. I’m going to stop here, and in my next post look at what SanDisk’s next move might be to complement the Pliant acquisition.

When the going gets tough, the tough go shopping.