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Electronic Design

Flash Memory Moves From Great Expectations To New Differentiation

Perhaps the best theme to depict 2006 was the year of 'Great Expectations'. NAND-based mobile storage, as well as NAND storage for computing, was introduced to the electronics industry last year. It carries the expectations of enabling sleeker, more robust, and truly mobile devices like notebooks, smart phones, and audio/video/gaming media players to allow the user to access his personal information anywhere at any time using flash memory.

Like the economy, flash memory did quite well in 2006—despite rising interest rates, higher energy prices, and the ongoing war in Iraq. Consequently both the economy and the semiconductor industry are in an upswing. As the year came to a close, a few important trends began to surface. The economy ended the year fairly strong (if you don’t take into account the housing market and high interest rates that were used as a check on 'inflation'), but the dollar is dropping against other major currencies. Although the stock markets rose to levels not seen in five years, there is a bit of trepidation regarding a softening of the U.S. economy. America may have to take a back seat in regards to its growth in relation to stronger prospects in Europe and Asia.

Correlating this economics scenario to the flash market points to how a few financial analysts are gauging their expectations for 2007 on whether the NAND market is overheated and headed for a dive or just in a 'normal' seasonal slump that will recover when a few new 'killer' flash applications surface in Q1 and Q2. These financial analysts claim that too much NAND production or supply will come on the market in Q1 and prices will tank much faster than in 2006. Such negative expectations are being vented on SanDisk and a few other tech stocks (except Apple, where the stock price is driven down by fears that the NAND market will decline or lose its growth in 2007). As a result, despite the impressive gains that the flash market made in 2006 and its bright future with more applications using mobile NAND storage, flash companies are being penalized because their growth models may not match the financial analysts' models.

As a counter to these 'glass is half empty' expectations, Web-Feet Research sees a few bright scenarios that can bring out more demand in 2007 that may offset fears of oversupply. Last month, Microsoft's Vista was released along with Office 2007 and Exchange, a move that should stimulate more PC upgrades—some of which employ flash cache. In gaming, Sony is increasing its shipments of the PlayStation 3, while Nintendo is shipping more units of the Wii console, and Microsoft Xbox 360 is also shipping more titles and systems. These three game consoles are consuming more flash on-board and in flash cards and USB drives. For the 2006 holiday season, CEA claimed that the number one gift would be upgrades of digital still cameras from 2MP cameras to over 5MP lens. Wide screen, flat HDTVs were also on many shopping lists, since both LCD and plasma sets have become more affordable. Flash cards are being discounted quite heavily and selling in volume. On the MP3 market, the iPod nano and shuffle are still the number one seller, SanDisk's Sansa is holding onto second place, while Microsoft is making a run at selling their newly-released Zune MP3 player with a 30-Gbyte 1.8-in. HDD.

In this industry, like in many others, timing is everything. Apple was the first company to rejuvenate the electronics industry through vertical integration and savvy brand marketing. In Apple's defense, they do have quite a track record for keeping secret about their plans and Jobs has sprung amazing 'opening night-like' product announcements that have turned the industry around many times. For the long term, Apple has placed its bets on NAND. The seasonality of slackening sales in Q1 is an established pattern. Demand will pick up in Q2 and beyond. With these patterns known by Apple, many rumors exist that Apple will be releasing an iPod phone or iPhone that will incorporate NAND storage for music playback this quarter. By Q2, Apple may release a flash-based video iPod player. These two releases (and possibly others) coming from Apple or other companies early this month should help to stimulate the industry during the winter doldrums.

Flash had amazing growth in 2005, reaching an all time record of $20.5 billion, while DRAM only produced $25.6 billion. In 2006, flash fought on two separate fronts; trying to rejuvenate the NOR market and concurrently continuing a healthy expansion of the NAND market reaching a total flash revenue of $22.9 billion. DRAM made an exceptional rebound in 2006, where the DRAM revenues should grow 25.8% in reaching over $32.1 billion, due by increasing ASPs for all products. DRAM should make further gains in 2007, as users upgrade their Windows operating system to Vista and add between 2 Gbytes and 4 Gbytes of DRAM to their PCs. Often these two memory markets do not overlap, except in the multi-chip package (MCP) or combo devices within the cell phone market. Margins for low-power DRAM, along with SRAM and pseudo SRAM, are much higher than DRAM in PCs, so Hynix and Samsung will devote more DRAM production to this growing market.

Like the computing market, the new mobile market is segmenting its system memory requirements into work memory and storage. Mobile work memory usage is growing at a 10% to 15% rate per year, while storage is tripling its size, as nearly unlimited amounts of music, video, and data files are stored predominantly on NAND Flash media. Some applications will use the small form factor (0.85-in. to 1-in.) microHDD and 1.8-in. to 2.5-in. HDD products offered from Hitachi, Seagate, Fujitsu, Toshiba, and others.

Apple is using a vertical market integration business model, where the company has streamlined the integration of services and products to deliver digital content to the end user. The net result is user satisfaction that is very high driven by easily accessing and playing this content on the Apple music and video iPods. When a manufacturer can develop or own more aspects of the value chain of 1) digital content creation, 2) content access/delivery, and 3) content usage (hardware), then that manufacturer has a better chance of building his business. This is all predicated on having a seamless delivery value chain that is driven by a savvy market branding campaign like Apple has done with the iPod media player. Both Microsoft (with its own music service like Urge), and SanDisk (using an alliance with Rhapsody) are trying to vertically integrate their MP3 players with content delivery channels, copying the Apple business model.

Another major trend announced last year on the various types of NAND flash matches the performance of the technology to three different market requirements, but its impact or expectations will not be fully realized for years. NAND was initially produced as a single-level cell (SLC) or 1-bit per cell that was able to achieve very fast write speeds, high endurance (100K+ cycles), high retention, and medium speed reads. SLC NAND works well in computing systems like solid state drives and flash caching matching these computing system requirements with its technology functionality.

In 2001, multi-level cell (MLC) 2-bit per cell, which can hold twice as much data as SLC NAND in the same die area, was developed by Toshiba and SanDisk. MLC NAND can function slightly less than SLC NAND performing at medium write and read speeds, medium to high endurance (100K-10K cycles), and has fairly good retention. Like SLC NAND, MLC NAND can be used for code execution in cell phones and data storage for media files.

In 2006, both Spansion and Saifun announced the 4-bit per cell quad bit NROM device, Samsung announced a 4-bit per cell dual trapped charge device and Msystems announced the x4 a 4-bit per cell MLC NAND design. The performance of these various 4-bit per cell devices varies depending on how well the technology is optimized. At a minimum, the 4-bit per cell NAND-type device should perform well enough to record and play back media (music, video, images) with low write and read speeds, low retention, and low endurance (1K or less cycles).

Figure 1 illustrates the performance characteristics of these three types of NAND devices and then maps or matches the market requirements for data storage, executing and code storage, and computing to these three NAND technologies. Initially, data storage used 1-bit prt cell and 2-bit per cell NAND and will be able to work with 4-bit per cell. Code execution can use 1-bit per cell and some 2-bit per cell NAND, but could use the 4-bit per cell for data storage of media files. Computing currently only uses 1-bit per cell and may be able to use 2-bit per cell by 2008 for some lesser stringent computing storage applications.

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