Samsung’s latest financial report reveals that the fourth-quarter shipments of DRAM and NAND Flash in 2023 exceeded previous expectations, reflecting an improvement in market demand. Samsung will continue selectively adjusting the production capacity of specific DRAM and NAND Flash products to boost prices.

Samsung Electronics’ memory business is expected to return to profit in the first quarter of 2024, signaling a recovery in the memory industry. Commercial Times reports that due to inventory improvements, Samsung’s utilization rate of DRAM is projected to increase from 70% in the fourth quarter of 2024 to 81% in the first quarter of 2024, and further rise to 89% in the second quarter.

According to industry sources cited in the Commercial Times’ report, Samsung’s fourth-quarter shipments of DRAM and NAND Flash in 2023 exceeded previous expectations. This was primarily attributed to Samsung’s memory experiencing a smaller price increase compared to its competitors, thereby accelerating the pace of inventory clearance, particularly in the case of DRAM, where improvements were more significant.

Samsung is expected to continue selectively adjusting the production of DRAM and NAND Flash products. As the first quarter is typically a slow season for the industry, Samsung anticipates a sequential decline in DRAM and NAND Flash shipments in the first quarter of 2024. However, prices are expected to continue rising.

Due to the destocking of Samsung’s DRAM for eight to ten weeks, it is expected to return to normal level by the end of the 1st quarter of 2024. Meanwhile, NAND Flash inventory is projected to normal level within the first half of 2024.

At the same time, Samsung plans to commence production of HBM3e 24GB products in the first half of 2024, with HBM3e 36GB products slated for production in the second half of the year, with progress ahead of schedule. Additionally, the development of the next-generation HBM4 is currently underway, with samples expected to be released in 2025 and mass production in 2026.

As per sources cited by the Commercial Times, reportedly, regarding HBM3 and HBM3e, HBM3 used in AI servers is still exclusively supplied by SK Hynix, with the highest yield in backend packaging, followed by Micron. Meanwhile, the report also indicates that HBM3e is expected to begin mass production in the first quarter of 2024. Micron’s outsourcing of backend TSV and stacking to TSMC has accelerated the product’s production speed.

As for the higher-spec HBM4, TrendForce expects its potential launch in 2026. With the push for higher computational performance, HBM4 is set to expand from the current 12-layer (12hi) to 16-layer (16hi) stacks, spurring demand for new hybrid bonding techniques. HBM4 12hi products are set for a 2026 launch, with 16hi models following in 2027.

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(Photo credit: Samsung)

Another breakthrough has emerged in flash memory layer technology! A recent report cited by tom’s Hardware has suggested that at the upcoming International Solid-State Circuits Conference (ISSCC) in February of this year, Samsung Electronics will unveil the next-generation V9 QLC NAND solution, pushing flash memory layer technology to 280 layers.

The Battle of Layers is Far from Over

Reportedly, Samsung’s V9 QLC boasts a storage density of 28.5Gb per square millimeter, achieving a maximum transfer rate of 3.2 Gbps. This surpasses the current leading QLC products (2.4 Gbps) and is poised to meet the requirements of future PCIe 6.0 solutions.

Additionally, the report further highlights that Samsung’s V9 QLC is considered the highest-density flash memory solution to date.

Before Samsung, major storage giants such as Micron and SK Hynix had already surpassed the 200-layer milestone. Micron reached 232 layers with a storage density of 19.5Gb per square millimeter, while SK Hynix achieved 238 layers with a storage density of 14.4Gb per square millimeter.

Still, 280 layers are not the end of the storage giants’ layer count competition; there will be breakthroughs with even higher layer counts in the future.

In August 2023, SK Hynix unveiled the world’s highest-layer 321-layer NAND flash memory samples, claimed to have become the industry’s first company developing NAND flash memory with over 300 layers, with plans for mass production by 2025.

Reportedly, SK Hynix’s 321-layer 1Tb TLC NAND achieves a 59% efficiency improvement compared to the previous generation 238-layer 512Gb. This is due to the ability to stack more units of data storage to higher levels, achieving greater storage capacity on the same chip, thereby increasing the output of chips per wafer unit.

On the other hand, Micron plans to introduce higher-layer products beyond the 232-layer milestone. Samsung, with ambitious plans, aims to stack V-NAND to over 1000 layers by 2030.

Kioxia and Western Digital, after showcasing their 218-layer technology in 2023 following the 162-layer milestone, also intend to develop 3D NAND products with over 300 layers in the future.

Amid Memory Market Rebound, What’s the Trend in NAND Flash Prices?

Amid economic headwinds and subdued demand in the consumer electronics market, the memory industry experienced a prolonged period of adjustment. It wasn’t until the fourth quarter of 2023 that the memory market began to rebound, leading to improved performances for related storage giants.

According to research conducted by TrendForce, a global market research firm, NAND Flash contract prices declined for four consecutive quarters starting from the third quarter of 2022, until they began to rise in the third quarter of 2023.

With a cautious outlook for market demand in 2024, the trend in NAND Flash prices will depend on the capacity utilization rates of suppliers.

TrendForce has projected a hike of 18-23% for NAND Flash contract prices, with a more moderated QoQ price increase of 3-8% for 2Q24. As the third quarter enters the traditional peak season, the quarterly price increase could potentially expand synchronously to 8-13%.

In 4Q24, the general price rally is anticipated to continue if suppliers maintain an effective strategy for controlling output. For NAND Flash products, their contract prices are forecasted to increase by 0-5% QoQ for 4Q24.

(Photo credit: Samsung)

SK Hynix CEO Kwak Noh-Jung expressed optimism at the Consumer Electronics Show (CES) in the United States, stating that artificial intelligence (AI) chips would propel SK Hynix’s market value to double within three years, reaching KRW 200 trillion (approximately USD 152 billion).

Kwak also revealed plans to adjust the DRAM production reduction policy in the first quarter, while anticipating changes in NAND Flash production strategy in the latter half of the year.

At the CES exhibition in Las Vegas, Kwak emphasized that generative AI is gradually becoming widespread, and memories are increasingly crucial. With the advancement of AI systems, customer demands for memory will become more diverse. Kwak highlighted the development of a platform to offer customized options for various customers.

“If we prepare the products we are currently producing well, pay attention to maximising investment efficiency and maintaining financial soundness, I think we can attempt to double the current market capitalisation of 100 trillion won to 200 trillion won within three years,” Kwak said.

Kwak further stated in the CES: “There are only three HBM providers in the market. What I can say for sure is that SK Hynix is a clear leader in the HBM space.”

For the current HBM market, as reported by TrendForce earlier, SK hynix holds the lead in HBM3 production, serving as the principal supplier for NVIDIA’s server GPUs.

Samsung, on the other hand, is focusing on satisfying orders from other CSPs. The gap in market share between Samsung and SK hynix is expected to narrow significantly in 2023 due to an increasing number of orders for Samsung from CSPs. Both firms are predicted to command similar shares in the HBM market sometime between 2023 to 2024—collectively occupying around 95%.

Meanwhile, when asked if SK Hynix would ease its current chip production reduction policy, Kwak responded that the company’s policies are flexible and will be adjusted based on different product categories.

He mentioned that SK Hynix might change its DRAM production reduction policy in the first quarter, while adjustments for NAND Flash are anticipated to take place in the latter half of the year.

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(Photo credit: SK Hynix)

Low-price SSDs (Solid-state drives) may have become a thing of the past in 2024. The three major memory manufacturers are reportedly pushing up the prices of NAND Flash, leading to rumors of a 50% increase in prices for all SSDs as well. The successive hikes in NAND Flash prices by suppliers are already beginning to impact the end market.

Industry sources cited by ctee have indicated that at the beginning of 2024, there is a continuous stream of news regarding price increases for memory products. However, as of now, new transaction prices have not been observed, and the situation is being closely monitored.

Furthermore, sources cited by ctee also stipulate that, since reaching its lowest point in August 2023, NAND Flash prices have experienced a cumulative increase of approximately 40% to 90%.

Previously, significant losses in NAND Flash led manufacturers to actively reduce production and increase quotes. Currently, manufacturers have yet returned to a break-even condition. It is widely anticipated within the industry that the upward trend in NAND Flash prices will persist into the first quarter of 2024. The aim is to promptly raise prices and achieve a break-even point.

According to TrendForce’s previous estimates, the average quarterly increase in prices for Mobile DRAM and NAND Flash (eMMC/UFS) in the first quarter of 2024 is expected to expand to a range of 18% to 23%. Additionally, it is not ruled out that in a market characterized by limited competition or in situations where brand customers panic and engage in price chasing, the increase in prices could further escalate.

The upward trend in NAND prices has also led to an increase in the prices of storage products in the consumer end market. According to the latest information from the supply chain in China cited by the media outlet mydrivers, it’s reported that SSD products are experiencing their first price hike in nine quarters and manufacturers are planning to continue requesting price increases after 2024 Q1.

An industry source suggests that NAND manufacturers, facing losses, have been actively adjusting prices. Since these manufacturers also produce SSDs for their own brands, their own brands need to follow suit in price increases, potentially influencing the entire market.

Recent rumors have also claimed that the SSDs from memory manufacturers are set to increase by 50%, with some sources suggesting at least a 30% hike. Whether this is an tentative price adjustment or a market-driven price surge prompted by demand remains to be closely observed.

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• Mobile DRAM and eMMC/UFS Prices to Surge 18–23% in 1Q24 as Smartphone Brands Continue Stockpiling, Says TrendForce
• [News] Market Anticipates a 50% Price Surge for NAND Flash in Short-Term

(Photo credit: Samsung)

According to icsmart’s report, in October, Samsung Electronics and SK Hynix received an indefinite exemption from the U.S. government’s control over exports to China, allowing them to import semiconductor manufacturing equipment without special permission for their facilities. Samsung has initiated efforts to boost capacity at its Xi’an plant.

Reportedly, Samsung Electronics‘s 12-inch NAND flash M-FAB fab has officially entered the main construction phase.

Established in Xi’an in 2012, it is Samsung’s sole overseas memory production base and has evolved into the world’s largest NAND Flash manufacturing facility. The fab produces over 265,000 12-inch wafers per month, contributing to over 40% of Samsung’s total NAND Flash flash production.

According to publicly available data, the initial investment for the first phase of Samsung’s Xi’an fab in China was USD 10.87 billion, and it commenced production in May 2014, primarily manufacturing 3D NAND flash memory chips.

On August 30, 2017, Samsung Semiconductor announced a USD 7 billion investment to build the second phase of the 12-inch NAND flash project, establishing a new NAND flash production line. In December 2019, the company decided to further invest USD 8 billion to expand the scale of the second-phase project.

Business Korea reports that Samsung executives have decided to upgrade the Xi’an NAND Flash fab to a 236-layer stacking process and significantly expand production. Industry sources indicate that Samsung has initiated the procurement of semiconductor equipment, with deliveries scheduled for the end of the year.

In 2024, the company plans to introduce eighth-generation NAND Flash equipment in succession. This move is seen by the industry as a strategy to counter the soft demand in the global NAND Flash market.

(Photo credit: Samsung)